1
EXHIBIT 10.1
================================================================================
AQUA-CHEM, INC.
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF JUNE 23, 1998
COMERICA BANK, AS AGENT
================================================================================
2
EXHIBIT 10.1
TABLE OF CONTENTS
Page
1. DEFINITIONS..............................................................................................1
2. REVOLVING CREDIT........................................................................................23
2.1 Revolving Credit Commitment...........................................................23
2.2 Accrual of Interest and Maturity......................................................24
2.3 Requests for Advances and Requests for Refundings and Conversions of
Revolving Credit Advances............................................................24
2.4 Disbursement of Revolving Credit Advances.............................................26
2.5 Prime-based Advance in Absence of Election or Upon Default............................27
2.6 Revolving Credit Facility Fee.........................................................27
2.7 Reduction of Indebtedness; Revolving Credit Aggregate Commitment......................27
2.8 Optional Reduction or Termination of Revolving Credit Aggregate
Commitment...........................................................................28
2.9 Extension of Revolving Credit Maturity Date...........................................28
3. LETTERS OF CREDIT.......................................................................................29
3.1 Letters of Credit.....................................................................29
3.2 Conditions to Issuance................................................................29
3.3 Notice................................................................................31
3.4 Letter of Credit Fees.................................................................31
3.5 Other Letter of Credit Fees...........................................................32
3.6 Draws and Demands for Payment Under Letters of Credit.................................32
3.7 Obligations Irrevocable...............................................................33
3.8 Risk Under Letters of Credit..........................................................34
3.9 Indemnification.......................................................................35
3.10 Right of Reimbursement................................................................36
3.11 Existing Letters of Credit............................................................36
4. SWING LINE CREDIT.......................................................................................37
4.1 Swing Line Advances...................................................................37
4.2 Accrual of Interest; Margin Adjustments...............................................37
4.3 Requests for Swing Line Advances......................................................37
4.4 Disbursement of Swing Line Advances...................................................39
4.5 Refunding of or Participation Interest in Swing Line Advances.........................39
5. MARGIN ADJUSTMENTS; INTEREST PAYMENTS...................................................................40
5.1 Margin Adjustments....................................................................40
5.2 Prime-based Interest Payments.........................................................41
5.3 Eurocurrency-based Interest Payments..................................................41
5.4 Quoted Rate Advance Interest Payments.................................................42
- i -
3
EXHIBIT 10.1
TABLE OF CONTENTS
(Continued)
Page
5.5 Interest Payments on Conversions......................................................42
5.6 Interest on Default...................................................................42
5.7 Prepayment of Revolving Credit and Swing Line Advances................................42
6. CONDITIONS..............................................................................................43
6.1 Execution of Notes and this Agreement.................................................43
6.2 Corporate Authority...................................................................43
6.3 Reaffirmation of Certain Loan Documents...............................................44
6.4 Real Estate Documentation.............................................................44
6.5 Insurance.............................................................................44
6.6 Compliance with Certain Documents and Agreements......................................44
6.7 Opinion of Counsel....................................................................44
6.8 Company's Certificate.................................................................45
6.9 Payment of Fees.......................................................................45
6.10 Pro Forma Balance Sheet...............................................................45
6.11 Existing Credit Facilities............................................................45
6.13 National Dynamics Acquisition Documents...............................................45
6.14 Subordinated Debt.....................................................................46
6.15 Perfection of Security Interests......................................................46
6.16 Other Documents and Instruments.......................................................46
6.17 Continuing Conditions.................................................................46
7. REPRESENTATIONS AND WARRANTIES..........................................................................47
7.1 Corporate Authority...................................................................47
7.2 Due Authorization - Company...........................................................47
7.3 Due Authorization - Guarantors........................................................47
7.4 Liens.................................................................................47
7.5 Taxes.................................................................................48
7.6 No Defaults...........................................................................48
7.7 Enforceability of Agreement and Loan Documents -- Company.............................48
7.8 Enforceability of Loan Documents -- Guarantors........................................48
7.9 Compliance with Laws..................................................................48
7.10 Non-contravention -- Company..........................................................49
7.11 Non-contravention -- Guarantors.......................................................49
7.12 No Litigation.........................................................................49
7.13 Consents, Approvals and Filings, Etc..................................................49
7.14 Agreements Affecting Financial Condition..............................................50
7.15 No Investment Company or Margin Stock.................................................50
7.16 ERISA.................................................................................50
7.17 Conditions Affecting Business or Properties...........................................50
- ii -
4
EXHIBIT 10.1
TABLE OF CONTENTS
(Continued)
Page
7.18 Environmental and Safety Matters......................................................51
7.19 Subsidiaries..........................................................................51
7.20 Accuracy of Information...............................................................51
7.21 Financial Statements - Company........................................................51
7.22 Solvency..............................................................................52
7.23 Year 2000 Requirement.................................................................52
8. AFFIRMATIVE COVENANTS...................................................................................53
8.1 Financial Statements..................................................................53
8.2 Certificates; Other Information.......................................................54
8.3 Payment of Obligations................................................................54
8.4 Conduct of Business and Maintenance of Existence......................................54
8.5 Maintenance of Property; Insurance....................................................55
8.6 Inspection of Property; Books and Records, Discussions................................55
8.7 Notices...............................................................................55
8.8 Hazardous Material Laws...............................................................56
8.9 Maintain Base Tangible Net Worth......................................................57
8.10 Fixed Charge Coverage Ratio...........................................................57
8.11 Senior Funded Debt to Consolidated EBITDA Ratio.......................................57
8.12 [Reserved]............................................................................57
8.13 [Reserved]............................................................................57
Taxes ...............................................................................................57
8.15 Governmental and Other Approvals......................................................57
8.16 Compliance with ERISA.................................................................57
8.17 ERISA Notices.........................................................................57
8.18 Security..............................................................................58
8.19 Defense of Collateral.................................................................58
8.20 Use of Proceeds.......................................................................58
8.21 Future Subsidiaries. .................................................................58
8.22 Financial Covenant Amendments.........................................................59
8.23 Further Assurances....................................................................59
9. NEGATIVE COVENANTS......................................................................................60
9.1 Limitation on Debt....................................................................60
9.2 Limitation on Liens...................................................................61
9.3 Limitation on Guarantee Obligations...................................................62
9.4 Acquisitions..........................................................................62
9.5 Limitation on Fundamental Changes and Sale of Assets..................................62
9.6 Restricted Payments...................................................................64
9.7 Limitation on Capital Expenditures....................................................64
- iii -
5
EXHIBIT 10.1
TABLE OF CONTENTS
(Continued)
Page
9.8 Limitation on Investments, Loans and Advances.........................................65
9.9 Transactions with Affiliates..........................................................66
9.10 Sale and Leaseback....................................................................66
9.11 Limitation on Negative Pledge Clauses.................................................66
9.12 Prepayment of Debts...................................................................66
9.13 Subordinated Obligations and Subordinated Debt........................................67
9.14 Modification of Certain Agreements....................................................67
10. DEFAULTS................................................................................................67
10.1 Events of Default.....................................................................67
10.2 Exercise of Remedies..................................................................70
10.3 Rights Cumulative.....................................................................70
10.4 Waiver by Company of Certain Laws.....................................................70
10.5 Waiver of Defaults....................................................................70
10.6 Set Off...............................................................................71
11. PAYMENTS, RECOVERIES AND COLLECTIONS....................................................................71
11.1 Payment Procedure.....................................................................71
11.2 Application of Proceeds of Collateral.................................................73
11.3 Pro-rata Recovery.....................................................................73
12. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS........................................................73
12.1 Reimbursement of Prepayment Costs.....................................................73
12.2 Agent's Eurocurrency Lending Office...................................................74
12.3 Circumstances Affecting Eurocurrency-based Rate Availability..........................74
12.4 Laws Affecting Eurocurrency-based Advance Availability................................74
12.5 Increased Cost of Eurocurrency-based Advances.........................................75
12.6 Indemnity.............................................................................76
12.7 Other Increased Costs.................................................................76
12.8 Substitution of Banks.................................................................77
13. AGENT...................................................................................................77
13.1 Appointment of Agent..................................................................77
13.2 Deposit Account with Agent............................................................78
13.3 Scope of Agent's Duties...............................................................78
13.4 Successor Agent.......................................................................79
13.5 Agent in its Individual Capacity......................................................79
13.6 Credit Decisions......................................................................79
13.7 Agent's Fees..........................................................................80
13.8 Authority of Agent to Enforce Notes and This Agreement................................80
- iv -
6
EXHIBIT 10.1
TABLE OF CONTENTS
(Continued)
Page
13.9 Indemnification.......................................................................80
13.10 Knowledge of Default..................................................................80
13.11 Agent's Authorization; Action by Banks................................................81
13.12 Enforcement Actions by the Agent......................................................81
14. MISCELLANEOUS...........................................................................................81
14.1 Accounting Principles.................................................................81
14.2 Consent to Jurisdiction...............................................................81
14.3 Law of Michigan.......................................................................82
14.4 Interest..............................................................................82
14.5 Closing Costs and Other Costs; Indemnification........................................82
14.6 Notices...............................................................................83
14.7 Further Action........................................................................84
14.8 Successors and Assigns; Participations; Assignments...................................84
14.9 Indulgence............................................................................87
14.10 Counterparts..........................................................................87
14.11 Amendment and Waiver..................................................................87
14.12 Confidentiality.......................................................................88
14.13 Withholding Taxes.....................................................................88
14.14 Taxes and Fees........................................................................89
14.15 WAIVER OF JURY TRIAL..................................................................89
14.16 Complete Agreement; Conflicts.........................................................89
14.17 Severability..........................................................................89
14.18 Table of Contents and Headings........................................................89
14.19 Construction of Certain Provisions....................................................90
14.20 Independence of Covenants.............................................................90
14.21 Reliance on and Survival of Various Provisions........................................90
14.22 Complete Agreement; Amendment and Restatement.........................................90
- v -
7
EXHIBIT 10.1
TABLE OF CONTENTS
(Continued)
SCHEDULES
Schedule 1.1 Pricing Matrix
Schedule 1.2 Percentages
Schedule 2 Insurance Deposits (Permitted Liens)
Schedule 3.1 Existing Letters of Credit
Schedule 6.2 List of Jurisdictions in which Company and/or Subsidiaries do
business
Schedule 6.3 List of Jurisdictions in which to file financing statements
Schedule 7.9 Compliance with Laws
Schedule 7.12 Litigation
Schedule 7.16 Employee Pension Benefit Plans
Schedule 7.18 Environmental Matters
Schedule 7.19 Subsidiaries
Schedule 7.20 Contingent Obligations
Schedule 8.8 Environmental Actions
Schedule 8.21 Real Estate Documentation
Schedule 9.1 Existing Debt
Schedule 9.2 Permitted Liens
Schedule 14.6 Notices
EXHIBITS
A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
B FORM OF REVOLVING CREDIT NOTE
C FORM OF NOTICE OF LETTERS OF CREDIT
D FORM OF REQUEST FOR SWING LINE ADVANCE
E FORM OF SWING LINE NOTE
F FORM OF SWING LINE BANK PARTICIPATION CERTIFICATE
G [Reserved]
H FORM OF COVENANT COMPLIANCE REPORT
I FORM OF ASSIGNMENT AGREEMENT
J FORM OF SUBORDINATION PROVISIONS
K FORMS OF INTERCOMPANY NOTE
L FORM OF REAFFIRMATION OF CERTAIN LOAN DOCUMENTS
- vi -
8
EXHIBIT 10.1
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This Second Amended and Restated Revolving Credit Agreement
("Agreement") is made as of the 23rd day of June, 1998, by and among the
financial institutions from time to time signatory hereto (individually a
"Bank," and any and all such financial institutions collectively the "Banks"),
Comerica Bank, as structuring, documentation and administrative agent for the
Banks (in such capacity, "Agent"), and Aqua-Chem, Inc., a Delaware corporation
(the "Company");
A. Company has requested that the Banks amend, renew and/or extend to
it revolving credit and letters of credit as previously extended to Company by
the Banks under that certain Amended and Restated Revolving Credit and Term Loan
Agreement dated as of December 5, 1997, by and among Company, Agent and the
Banks (the "Prior Credit Agreement") on the terms and conditions set forth
herein.
B. The Banks are prepared to extend such credit as aforesaid, by
amendment and renewal (but not in novation) of the Prior Credit Agreement, but
only upon the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the covenants contained herein,
Company, the Banks and Agent agree as follows:
COMPANY, AGENT AND BANKS AGREE:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Account Party(ies)" shall mean, with respect to any Letter of Credit,
the account party or parties (which shall be the Company, individually, or a
Domestic Significant Subsidiary which is a Guarantor jointly and severally with
Company) named in an application to the Issuing Bank for the issuance of such
Letter of Credit.
"Account(s)" shall mean any account or account receivable as defined
under the UCC, including without limitation, with respect to any Person, any
right of such Person to payment for goods sold or leased or for services
rendered.
"Account Debtor" shall mean the party who is obligated on or under
any Account.
"Actual Capital Expenditures" shall mean as of any date of
determination, Capital Expenditures minus that portion of such Capital
Expenditures financed under Capitalized Leases or other Debt.
9
EXHIBIT 10.1
"Adjusted Consolidated Tangible Net Worth" shall mean, as of any date
of determination, Consolidated Tangible Net Worth as of such date plus an
amount equal to the aggregate outstanding principal amount of the Subordinated
Debt as of such date.
"Advance(s)" shall mean, as the context may indicate, a borrowing
requested by Company, and made by the Banks under Section 2.1 hereof or
requested by the Company and made by the Swing Line Bank under Section 4.1
hereof, including without limitation any readvance, refunding or conversion of
such borrowing pursuant to Section 2.3 or 4.5 hereof, any advance in respect of
a Letter of Credit under Section 3.6 hereof (including without limitation the
unreimbursed amount of any draws under any Letters of Credit), and shall
include, as applicable, a Eurocurrency-based Advance, a Prime-based Advance, and
a Quoted Rate Advance.
"Affected Lender" shall have the meaning set forth in Section 12.8.
"Affiliate" shall mean, with respect to any Person, any other Person or
group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise. Unless otherwise specified to the contrary herein, or the context
requires otherwise, Affiliate shall refer to the Company's Affiliates.
"Agent" shall mean Comerica Bank, in its capacity as agent for the
Banks hereunder, or any successor agent appointed in accordance with Section
13.4 hereof.
"Agent's Fees" shall mean those agency, and other fees and expenses
required to be paid by Company to Agent under Section 13.7 hereof.
"Alternate Base Rate" shall mean, for any day, an interest rate per
annum equal to the Federal Funds Effective Rate in effect on such day, plus one
percent (1%).
"Applicable Evaluation Date" shall mean the last day of the Company's
most recent fiscal year (i) which ended prior to the applicable date an event or
transaction proposed to be undertaken by the Company is to be tested hereunder
and (ii) for which the Banks have received audited financial statements pursuant
to Section 8.1(a) hereof; provided, however, that until the Company has
delivered the financial statements required under Section 8.1(a) hereof for its
fiscal year ending March 31, 1999, (x) the Applicable Evaluation Date shall be
June 23, 1998 and (y) all such evaluations shall be based on the Closing Pro
Forma Balance Sheet.
"Applicable Facility Fee Percentage" shall mean as of any date of
determination thereof, the applicable percentage used to calculate the Revolving
Credit Facility Fee due and payable
2
10
EXHIBIT 10.1
hereunder, determined by reference to the appropriate columns in the pricing
matrix attached to this Agreement as Schedule 1.1.
"Applicable Interest Rate" shall mean the Eurocurrency-based Rate, the
Prime-based Rate, or the Quoted Rate, as selected by Company from time to time
subject to the terms and conditions of this Agreement.
"Applicable L/C Fee Percentage" shall mean, as of any date of
determination thereof, the applicable percentage used to calculate the Letter of
Credit Fees due and payable hereunder, determined by reference to the
appropriate columns in the pricing matrix attached to this Agreement as Schedule
1.1.
"Asset Disposition" shall mean the disposition, whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise of any of the
following: (a) any of the equity interest or stock of the Company or any of its
Subsidiaries or (b) any or all of the assets of the Company or its Subsidiaries
other than sales of Inventory in the ordinary course of business.
"Asset Sale" shall mean the sale, transfer or other disposition by the
Company or any Subsidiary of any asset to any Person, other than sales,
transfers or other dispositions of inventory in the ordinary course of business;
provided, however that Asset Sales shall not include assets damaged, destroyed
or condemned which the Company or such Subsidiary has replaced, or has begun the
process of replacing, within 180 days of such damage, destruction or
condemnation with the proceeds of insurance.
"Banks" shall mean Comerica Bank and the other Banks signatory hereto
and such other financial institutions from time to time parties hereto as
lenders and shall include the Swing Line Bank and any assignee which becomes a
Bank pursuant to Section 14.8 hereof.
"Base Tangible Net Worth" shall mean (i) $70,000,000 plus (ii) (on a
cumulative basis) for each fiscal quarter ending on or after the Effective Date,
the sum of (A) fifty percent (50%) of Consolidated Net Income (if positive),
earned in each fiscal quarter commencing after the Effective Date and (B) one
hundred percent (100%) of the cash proceeds of the issuance of any Equity
Interests of Company (net of reasonable and customary costs and expenses of
issuance) during such fiscal quarter.
"Business Day" shall mean any day on which commercial banks are open
for domestic and international business in Detroit, London and New York.
"CapEx Limit" shall mean for fiscal years ending March 31, 1999 and
March 31, 2000, $8,000,000 and for each fiscal year thereafter, the greater of
$7,000,000 or three percent (3%) of the Company's Consolidated revenues
(determined according to GAAP) for the immediately preceding fiscal year but in
any event not to exceed $10,000,000.00.
3
11
EXHIBIT 10.1
"Capital Expenditures" shall mean, for any period of determination, the
amount capitalized as capital expenditures for the period in question, under
GAAP, as property, plant, and equipment or similar fixed asset accounts, plus
deposits made during such period in connection with property, plant, and
equipment; less deposits of a prior period included above.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) with respect to which the
discounted present value of the rental obligations of such Person as lessee
thereunder, in conformity with GAAP, is required to be capitalized on the
balance sheet of that Person.
"▇▇-▇▇▇▇▇▇" shall mean ▇▇-▇▇▇▇▇▇ Sales and Service, Inc., a Delaware
corporation, and the wholly-owned Subsidiary of Company.
"Closing Pro Forma Balance Sheet" is defined in Section 6.10 hereof.
"Collateral" shall mean all property or rights in which a security
interest, mortgage, lien or other encumbrance for the benefit of the Banks is or
has been granted or arises or has arisen, under or in connection with this
Agreement, the other Loan Documents, or otherwise.
"Collateral Documents" shall mean the Pledge Agreement, the Parent
Pledge Agreement, the Security Agreement, the Mortgages, and all of the other
acknowledgments, certificates, stock powers, financing statements, instruments
and other security documents executed by Company or any Domestic Subsidiary in
favor of the Agent for the benefit of the Banks and delivered to the Agent, as
security for the Indebtedness, in connection with this Agreement, the other Loan
Documents, in each case, as such collateral documents may be amended or
otherwise modified from time to time.
"Comerica Bank" shall mean Comerica Bank, a Michigan banking
corporation, its successors or assigns.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Company within the meaning
of Section 4001 of ERISA or which is part of a group which includes the Company
and which is treated as a single employer under Section 414 of the Internal
Revenue Code.
"Company" is defined in the Preamble.
"Consolidated" or "Consolidating" shall mean, when used with reference
to any financial term in this Agreement, the aggregate for two or more Persons
of the amounts signified by such term for all such Persons determined on a
consolidated basis in accordance with GAAP. Unless otherwise specified herein,
references to Consolidated financial statements or data of Company includes
consolidation with its Subsidiaries in accordance with GAAP.
4
12
EXHIBIT 10.1
"Consolidated EBITDA" shall mean net income (or loss) of the Company
and its Subsidiaries, for the period in question, on a Consolidated basis
but excluding: (a) the income (or loss) of any Person (other than
Subsidiaries of the Company) in which the Company or any of its Subsidiaries
has an ownership interest, unless received by the Company or its
Subsidiaries in a cash distribution; and (b) the income (or loss) of any
Person accrued prior to the date it became a Subsidiary of the Company or
is merged into or consolidated with the Company, plus the sum of the
following: (i) any provision for (or less any benefit from) income and
franchise taxes included in the determination of net income; (ii)
Interest Expense net of interest income, deducted in the determination of
net income; (iii) depreciation deducted in the determination of net income;
(iv) amortization deducted in determining net income; (v) losses (or less
gains) from Asset Dispositions or other non-cash items included in the
determination of net income (excluding sales, expenses or losses related
to current assets) and all restructuring charges related to the closing of
the Company's Greenville, Mississippi manufacturing facility (as
permitted hereunder); (vi) extraordinary losses (or less gains), as defined
under GAAP, net of related tax effects included in the determination of net
income; (vii) other expense (as set forth in the Company's financial
statements); (viii) less other income; and (ix) expenses of the transactions
completed pursuant to the Transaction Documents included in the determination
of net income provided that such expenses were included in the Initial Pro
Forma Balance Sheet (as defined in the Prior Credit Agreement) and in the
Closing Pro Forma Balance Sheet, as the case may be, or disclosed in the
notes thereto.
"Consolidated Fixed Charges" shall mean Interest Expense for the
preceding four quarters, plus any provision for (benefit from) income or
franchise taxes included in the determination of net income for such period,
plus scheduled payments of principal with respect to all Debt (including the
principal portion of scheduled payments of Capitalized Lease obligations) of the
Company and its Subsidiaries for the immediately succeeding four quarters, plus
all rental and lease expenses of the Company and its Subsidiaries for the
preceding four quarters; in each case determined (without duplication) on a
Consolidated basis.
"Consolidated Funded Debt" shall mean as of any date of determination,
the sum, without duplication, of (a) all indebtedness of Company and its
Consolidated Subsidiaries for borrowed money (including all Subordinated Debt)
or for the deferred purchase price of property or services as of such date
(other than trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices) or which is evidenced by a note,
bond, debenture or similar instrument, (b) all obligations of Company and its
Consolidated Subsidiaries under Capitalized Leases as of such date, (c) all
obligations of Company and its Consolidated Subsidiaries in respect of letters
of credit, acceptances or similar obligations issued or created for the account
of Company or any of its Consolidated Subsidiaries as of such date, (d) all
liabilities secured by any lien on any property owned by Company or its
Consolidated Subsidiaries as of such date even though Company or such
Subsidiaries, as applicable, have not assumed or otherwise become liable for the
payment thereof, (e) all Guarantee Obligations of Company and its Consolidated
Subsidiaries as of such date, and (f) all other contingent obligations of the
Company and its Consolidated Subsidiaries which should be classified as
liabilities in accordance with GAAP (but excluding pending litigation not yet
reduced to judgment), in each case determined in accordance with GAAP.
5
13
EXHIBIT 10.1
"Consolidated Net Income" shall mean, for any period of determination,
the net income (but not loss) of Company and its consolidated Subsidiaries for
such period, determined in accordance with GAAP.
"Consolidated Net Worth" shall mean as of any date all amounts that
would be included under stockholders' equity on a Consolidated balance sheet of
Company and its consolidated Subsidiaries determined in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, as of any applicable date
of determination, the difference between (i) net book value of all assets of the
Company and its Consolidated Subsidiaries (other than patents, patent rights,
trademarks, trade names, franchises, copyrights, licenses, goodwill and similar
intangible assets), minus (ii) all Debt of Company and its Consolidated
Subsidiaries, in each case as reflected on the balance sheet of the Company's
most recently delivered financial statements.
"Contractual Obligation" shall mean as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Covenant Compliance Report" shall mean the report to be furnished by
Company to the Agent pursuant to Section 8.2(a) hereof, in the form of attached
Exhibit H and certified by a Responsible Officer, in which report Company shall
set forth, among other things, detailed calculations and the resultant ratios or
financial tests with respect to the financial covenants contained in Sections
8.9 through 8.13, and Sections 9.1, 9.5(d) and 9.7(b) of this Agreement and
shall calculate the ratio of Consolidated Funded Debt to Consolidated EBITDA.
"De Minimis Matters" shall mean environmental or other matters, the
existence of which and any liability which may result therefrom, would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the financial condition or businesses of the Company and its
Subsidiaries (taken as a whole) or on the ability of the Company and
Subsidiaries (taken as a whole) to pay their debts, as such debts become due.
"Debt" shall mean, as of any applicable date of determination, all
items of indebtedness, obligation or liability of a Person, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, that should be classified as liabilities in
accordance with GAAP, including without limitation, any items so classified on a
balance sheet and any reimbursement obligations in respect of letters of credit,
obligations in respect of bankers acceptances, provided, however that for
purposes of calculating the aggregate Debt of such Person and its Subsidiaries
(if any), the direct and indirect and absolute and contingent obligations of
such Person (whether direct or contingent) shall be determined without
duplication.
"Default" shall mean any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default under this
Agreement.
6
14
EXHIBIT 10.1
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
"Domestic Significant Subsidiary(ies)" shall mean any Domestic
Subsidiary which is also a Significant Subsidiary.
"Domestic Subsidiary(ies)" shall mean those direct or indirect
Subsidiaries of the Company incorporated under the laws of the United States of
America, or any state thereof.
"Effective Date" shall mean the date on which all the conditions
precedent set forth in Sections 6.1 through 6.16 have been satisfied.
"Environmental Reserve" shall mean an initial amount of $1,000,000, to
be held back from availability to the Company of Advances of the Revolving
Credit, subject to reductions in such holdback in amounts approved from time to
time by the Majority Banks (based on the estimated costs set forth on Schedules
8.8A and 8.8B hereto or such other cost information acceptable to the Majority
Banks), from time to time, upon completion of Environmental Tasks in accordance
with Section 8.8 hereof, such reductions to become effective upon determination
by the Majority Banks that the applicable Environmental Tasks have been
completed in accordance with this Agreement (such determination to be in the
sole discretion of the Majority Banks and promptly confirmed in writing to
Company, if and when such determination has been made).
"Environmental Tasks" shall mean those environmental compliance and
remediation measures set forth (and identified as Environmental Tasks) on
Schedules 8.8A and 8.8B hereto which Company is obligated to conduct and
complete pursuant to Section 8.8 hereof.
"Equity Interests" means, with respect to any Person, any and all
shares, share capital, interests, participations, warrants, options or other
equivalents (however designated) of capital stock of a corporation and any and
all equivalent ownership interests in a Person (other than a corporation).
"Equity Partners" shall mean Whitney Equity Partners, L.P., a Delaware
limited partnership.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor act or code and the regulations in effect from time
to time thereunder.
"Eurocurrency-based Advance" shall mean an Advance which bears interest
at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean, with respect to any
Eurocurrency-Interest Period, the per annum interest rate which is equal to the
sum of the Margin plus the quotient of:
(A) the per annum interest rate at which deposits in eurodollars
are offered to Agent's Eurocurrency Lending Office by other
prime banks in the eurodollar market in an amount comparable
to the relevant Eurocurrency-based Advance and for a period
7
15
EXHIBIT 10.1
equal to the relevant Eurocurrency-Interest Period at
approximately 11:00 a.m. Detroit time two (2) Business Days
prior to the first day of such Eurocurrency-Interest Period,
divided by
(B) an amount equal to one minus the stated maximum rate
(expressed as a decimal) of all reserve requirements
(including, without limitation, any marginal, emergency,
supplemental, special or other reserves) that is specified on
the first day of such Eurocurrency-Interest Period by the
Board of Governors of the Federal Reserve System (or any
successor agency thereto) for determining the maximum reserve
requirement with respect to eurodollar funding (currently
referred to as "eurocurrency liabilities" in Regulation D of
such Board) maintained by a member bank of such System, all as
conclusively determined (absent manifest error) by the Agent,
such sum to be rounded upward, if necessary, to the nearest
whole multiple of 1/16th of 1%.
"Eurocurrency-Interest Period" shall mean the Interest Period
applicable to a Eurocurrency-based Advance.
"Eurocurrency Lending Office" shall mean, (a) with respect to the
Agent, Agent's office located at Grand Cayman, British West Indies or such other
branch or branches of Agent, domestic or foreign, as it may hereafter designate
as a Eurocurrency Lending Office by notice to Company and the Banks, and (b) as
to each of the Banks, its office, branch or affiliate located at its address set
forth in Agent's administrative questionnaire completed by such Bank (or
identified thereon as a Eurocurrency Lending Office), or at such other office,
branch or affiliate of such Bank as it may hereafter designate as its
Eurocurrency Lending Office by notice to Company and Agent.
"Event of Default" shall mean each of the Events of Default specified
in Section 10.1 hereof.
"Existing Letters of Credit" means those letters of credit listed on
Schedule 3.1 hereto which were issued by the Agent for the account of the
Account Parties listed on such schedule before the Effective Date, as such
letters of credit may be amended, modified, or supplemented from time to time in
accordance with the terms hereof and thereof.
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it, all as conclusively determined by the Agent, such sum to be
rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.
"Fees" shall mean the Revolving Credit Facility Fee, the Letter of
Credit Fees, the Agent's Fees, and the other fees and charges payable by Company
to the Banks or Agent hereunder.
8
16
EXHIBIT 10.1
"Financial Statements" shall mean all those balance sheets, earnings
statements and other financial data (whether of the Company or the Subsidiaries)
which have been furnished to the Agent or the Banks for the purposes of, or in
connection with, this Agreement and the transactions contemplated hereby.
"Fixed Charge Coverage Ratio" shall mean, for any period of
determination, a ratio (A) the numerator of which shall be equal to Consolidated
EBITDA plus all rental and lease expenses of the Company and its Subsidiaries
for such period, and (B) the denominator of which is Consolidated Fixed Charges
for such period.
"Foreign Subsidiary(ies)" shall mean all of the Company's direct or
indirect Subsidiaries other than the Domestic Subsidiaries.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect on the date hereof, consistently applied.
"Governmental Obligations" means noncallable direct general obligations
of the United States of America or obligations the payment of principal of and
interest on which is unconditionally guaranteed by the United States of America.
"Guarantee Obligation" shall mean as to any Person (the "guaranteeing
person") any obligation of the guaranteeing person in respect of any obligation
of another Person (including, without limitation, any bank under any letter of
credit), the creation of which was induced by a reimbursement agreement, counter
indemnity or similar obligation issued by the guaranteeing person, in either
case guaranteeing or in effect guaranteeing any Debt, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Company in good faith.
9
17
EXHIBIT 10.1
"Guarantor(s)" shall mean the Parent and each Domestic Significant
Subsidiary of the Company and each Person otherwise becoming a Domestic
Significant Subsidiary of the Company subsequent to the date hereof or otherwise
entering into a Guaranty (by joinder agreement or otherwise) from time to time
and shall as of the date of execution of this Agreement consist of the Domestic
Subsidiaries listed on Schedule 7.19 hereto.
"Guaranty" shall mean the Guaranty made by each of the Guarantors in
favor of the Agent for the ratable benefit of the Banks in connection with the
Prior Agreement (or to be made by execution of a Joinder Agreement substantially
in the form of the Joinder Agreement attached as "Exhibit A" to such Guaranty),
as amended or otherwise modified from time to time.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances,
rules, regulations, orders, decrees and directives issued by any federal, state,
provincial, local, foreign or other governmental or quasi-governmental authority
or body (or any agency, instrumentality or political subdivision thereof)
pertaining to any hazardous, toxic or dangerous waste, substance or material on
or about any facilities owned, leased or operated by Company or any of its
Subsidiaries, or any portion thereof including, without limitation, those
relating to soil, surface, subsurface ground water conditions and the condition
of the ambient air; and any state and local laws and regulations pertaining to
any hazardous, toxic or dangerous waste, substance or material and/or asbestos;
any so-called "superfund" or "superlien" law; and any other federal, state,
provincial, foreign or local statute, law, ordinance, code, rule, regulation,
order or decree regulating, relating to, or imposing liability or standards of
conduct concerning, any hazardous, toxic or dangerous waste, substance or
material, as now or at any time hereafter in effect.
"Hedging Transaction" means each interest rate swap transaction, basis
swap transaction, forward rate transaction, commodity swap transaction, equity
transaction, equity index transaction, foreign exchange transaction, cap
transaction, floor transaction (including any option with respect to any of
these transactions and any combination of any of the foregoing) entered into by
the Company from time to time pursuant to an Interest Rate Protection Agreement;
provided that such transaction is entered into for risk management purposes and
not for speculative purposes.
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement and not to any particular paragraph or provision of this Agreement.
"Indebtedness" shall mean all indebtedness and liabilities (including
without limitation interest, fees and other charges) arising under this
Agreement or any of the other Loan Documents, whether direct or indirect,
absolute or contingent, of Company or any Subsidiary to any of the Banks or to
the Agent, in any manner and at any time, whether evidenced by the Notes,
arising under any Guaranty or any of the other Loan Documents, due or hereafter
to become due, now owing or that may hereafter be incurred by Company or any
Subsidiary to, any of the Banks or the Agent, and any judgments that may
hereafter be rendered on such indebtedness or any part thereof, with interest
10
18
EXHIBIT 10.1
according to the rates and terms specified, or as provided by law, any payment
obligations, if any, under Hedging Transactions evidenced by Interest Rate
Protection Agreements, and any and all consolidations, amendments, renewals,
replacements, substitutions or extensions of any of the foregoing; provided,
however that for purposes of calculating the Indebtedness outstanding under the
Notes or any of the other Loan Documents, the direct and indirect and absolute
and contingent obligations of the Company and the Subsidiaries (whether direct
or contingent) shall be determined without duplication.
"Initial Acquisition" shall mean the acquisition by merger, pursuant to
the terms and conditions of the Agreement and Plan of Reorganization, of the
Company by the Parent.
"Initial Acquisition Documents" shall mean the Agreement and Plan of
Reorganization, the Securities Purchase Agreement, the Warrant, the Registration
Rights Agreement, the Stockholders' and Members' Agreement, the Contribution
Agreement, the ▇▇▇▇▇▇ Employment Agreement, the Certificate of Designation, the
Certificate of Merger, the Agreement and Plan of Merger (each such term, to the
extent not defined herein, as defined in the Original Credit Agreement), and the
Certificate of Amendment to the Certificate of Incorporation of the Company
dated as of the date hereof ("Restated Articles"), together with all other
documents and instruments executed and delivered in connection with the Initial
Acquisition, each as amended to the date hereof and as the same may be further
amended or otherwise modified from time to time in compliance with the terms of
this Agreement.
"Intercompany Loan" shall mean any loan (or advance in the nature of a
loan) by the Company or any 100% Significant Subsidiary to another 100%
Significant Subsidiary and/or any loan (or advance in the nature of a loan) by
Aqua-Chem International, Inc. to the Company; provided, however that each such
loan or advance is subordinated in right of payment and priority to the
Indebtedness on terms and conditions satisfactory to Agent and the Banks; and
provided further however that, all such loans shall be evidenced by Intercompany
Notes (copies or originals of which shall have been delivered to Agent), which
notes, except for Intercompany Notes issued to a Foreign Subsidiary, shall be
pledged to the Agent for the benefit of the Banks as security for the
Indebtedness hereunder.
"Intercompany Loans, Advances or Investments" shall mean any
Intercompany Loan and any advance or investment by the Company or any 100%
Significant Subsidiary (including without limitation any guaranty of obligations
or indebtedness to third parties) to or in another 100% Significant Subsidiary.
"Intercompany Note" shall mean an Intercompany Note evidencing
Intercompany Loans substantially in the form of Exhibit K-1 or K-2, as
applicable, and otherwise on terms and conditions satisfactory to the Agent and
the Banks.
"Interest Coverage Ratio" shall mean, for any period of determination,
a ratio (A) the numerator of which shall be equal to EBITDA for such period and
(B) the denominator of which shall be Interest Expense for such period less
amortization of capitalized fees and expenses incurred
11
19
EXHIBIT 10.1
with respect to the Transaction Documents included in the calculation of such
Interest Expense, less interest paid in kind and included in the calculation of
such Interest Expense.
"Interest Expense" shall mean, with respect to the Company and its
Subsidiaries on a consolidated basis for any period, the sum of (a) gross
interest expense of the Company and its Subsidiaries for such period determined
on a Consolidated basis in accordance with GAAP consistently applied, including
(i) the amortization of debt discounts, (ii) the amortization of all fees
payable in connection with the incurrence of Debt to the extent included in
interest expense, (iii) the portion of any payments or accruals with respect to
Capitalized Lease obligations allocable to interest expense and (iv) all
commissions paid to factors during such period, and (b) any other capitalized
interest of the Company and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"Interest Period" shall mean (a) with respect to a Eurocurrency-based
Advance, one (1), two (2), three (3) or six (6) months (or any lesser or greater
number of days agreed to in advance by Company, Agent and the Banks) as selected
by Company pursuant to Section 2.3, provided, however, that any
Eurocurrency-Interest Period which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month and (b) with respect to a Swing
Line Advance, shall mean a period of one (1) to thirty (30) days agreed to in
advance by Company and the Swing Line Bank as selected by Company pursuant to
Section 4.3. Each Interest Period which would otherwise end on a day which is
not a Business Day shall end on the next succeeding Business Day or, if such
next succeeding Business Day falls in the next succeeding calendar month, on the
next preceding Business Day, and no Interest Period which would end after the
Revolving Credit Maturity Date, shall be permitted with respect to any Advance.
"Interest Rate Protection Agreement" means any interest rate swap, cap,
floor, collar, forward rate agreement, foreign currency agreement or other rate
protection transaction, or any combination of such transaction or agreements or
any option with respect to any such transactions or agreements now existing or
hereafter entered into between Company and any Bank or an Affiliate of a Bank.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated thereunder.
"Inventory" shall have the meaning assigned to such term in the UCC in
effect on the date of this Agreement.
"Investment" shall mean, when used with respect to any Person, (a) any
loan, investment or advance made by such Person to any other Person (including,
without limitation, any contingent obligation) in respect of any capital stock,
Debt, obligation or liability of such other Person and (b) any other investment
made by such Person (however acquired) in stock or other ownership interests
12
20
EXHIBIT 10.1
in any other Person, including, without limitation, any investment made in
exchange for the issuance of shares of stock of such Person.
"Issuing Bank" shall mean Comerica Bank in its capacity as issuer of
one or more Letters of Credit hereunder.
"Issuing Office" shall mean Issuing Bank's office located at One
Detroit Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or such other
office as Issuing Bank shall designate as its Issuing Office.
"Joinder Agreement (Guaranty)" shall mean a joinder agreement
substantially in the form attached as "Exhibit A" to the form of the Guaranty,
to be executed and delivered by any Person required to be a Guarantor pursuant
to Section 8.21 of this Agreement.
"Joint Venture" shall mean any corporation, partnership, association,
joint stock company, business trust or other combined enterprise, other than a
Consolidated Subsidiary, in which (or to which) the Company or any of its
Subsidiaries has made a loan, investment or advance or has an ownership stake or
interest, whether in the nature of share capital, partnership or equity interest
or otherwise.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Issuing
Bank of an Account Party or Account Parties requesting Issuing Bank to issue
such Letter of Credit, as amended from time to time.
"Letter of Credit Fees" shall mean the letter of credit fees and the
facing fees payable to Agent for the accounts of the Banks (including the
Issuing Bank) in connection with Letters of Credit pursuant to Section 3.4
hereof.
"Letter of Credit Obligations" shall mean at any date of determination,
the sum of (a) the aggregate undrawn amount of all Letters of Credit then
outstanding, (b) the aggregate face amount of all Letters of Credit requested
but not yet issued as of such date and (c) the aggregate amount of Reimbursement
Obligations which have not been reimbursed by the Company as of such date.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Issuing Bank in its capacity hereunder as issuer of a Letter of
Credit as a result of a draft or other demand for payment under any Letter of
Credit.
"Letter(s) of Credit" shall mean any standby or trade letters of credit
issued by Issuing Bank at the request of or for the account of an Account Party
or Account Parties pursuant to Article 3 hereof and shall include Existing
Letters of Credit.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, trust receipt, conditional sale
or title retaining contract, sale and leaseback transaction, financing statement
or comparable notice or other filing or recording,
13
21
EXHIBIT 10.1
Capitalized Lease, subordination or any claim or right, or any other type of
lien, charge, encumbrance, preferential or priority arrangement or other claim
or right, whether based on common law or statute.
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
the Letter of Credit Agreements, the Letters of Credit, the Guaranty(ies), the
Collateral Documents, the Subordination Agreement, the Reaffirmation of Certain
Loan Documents, any Interest Rate Protection Agreement and any other documents,
certificates, instruments or agreements executed pursuant to or in connection
with any such document or this Agreement, as such documents may be amended from
time to time.
"Lyonnaise and Gestra" shall mean Lyonnaise American Holding Company,
Inc. and Gestra Corporation, N.V.
"Majority Banks" shall mean at any time Banks holding 66-2/3% of the
aggregate principal amount of the Indebtedness then outstanding under the Notes
(provided that, for purposes of determining Majority Banks hereunder,
Indebtedness outstanding under the Swing Line Notes shall be allocated among the
Banks based upon their respective Percentages), or, if no Indebtedness is then
outstanding, Banks holding 66-2/3% of the Percentages.
"Margin" shall mean, as of any date of determination thereof, the
applicable interest rate margin determined in accordance with the provisions of
Section 5.1 hereof by reference to the appropriate columns in the pricing matrix
attached to this Agreement as Schedule 1.1.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, property, or financial condition of the Company and
its Subsidiaries taken as a whole, (b) the ability of the Company to perform its
obligations under this Agreement, the Notes or any other Loan Document to which
it is a party, or (c) the validity or enforceability of this Agreement, any of
the Notes or any of the other Loan Documents or the rights or remedies of the
Agent or the Banks hereunder or thereunder.
"Mortgages" shall mean the mortgages of real property owned by the
Company in Wisconsin, Tennessee and Georgia delivered in connection with the
Original Credit Agreement, the mortgages of real property acquired pursuant to
the National Dynamics Acquisition and any mortgage of real property owned by the
Company or any Domestic Subsidiary delivered after the Effective Date, in each
case as such mortgages may be amended or otherwise modified from time to time
and "Mortgage" shall mean any of them.
"Multiemployer Plan" shall mean a Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"National Dynamics" shall mean National Dynamics Corporation, a
Nebraska corporation.
14
22
EXHIBIT 10.1
"National Dynamics Acquisition" shall mean the acquisition by the
Company of certain assets and the assumption of certain liabilities, pursuant to
the terms and conditions of the National Dynamics Asset Purchase Agreement.
"National Dynamics Acquisition Documents" shall mean the National
Dynamics Asset Purchase Agreement together with all other documents and
instruments executed and delivered in connection with the National Acquisition.
"National Dynamics Asset Purchase Agreement" shall mean that certain
asset purchase agreement dated as of May 28, 1998 by and among the Company,
National Dynamics and certain shareholders of National Dynamics, as such
agreement may be amended (subject to the terms hereof) from time to time.
"Notes" shall mean the Revolving Credit Notes and the Swing Line Note.
"Original Credit Agreement" shall mean that certain Revolving Credit
and Term Loan Agreement dated as of July 31, 1997, by and among Company, Agent
and the financial institutions signatory thereto.
"Parent" shall mean Rush Creek, LLC, a Wisconsin limited liability
company.
"Parent Operating Agreement" shall mean the Rush Creek LLC Operating
Agreement dated as of July 31, 1997, as amended (subject to the terms hereof)
from time to time.
"Parent Pledge Agreement" shall mean the Parent Pledge Agreement
executed and delivered by Parent in favor of the Agent in connection with the
Original Credit Agreement, as amended or otherwise modified from time to time.
"Percentage" shall mean, with respect to any Bank, its percentage
share, as set forth on Schedule 1.2 hereto, of the Revolving Credit Aggregate
Commitment and Letters of Credit, as the context indicates, as such Exhibit may
be revised from time to time by Agent in accordance with provisions of Section
14.8.
"Permitted Acquisition" shall mean any acquisition by the Company or
any Subsidiary of all or substantially all of the assets of another Person, or
of a division or line of business of another Person, or shares of stock or other
ownership interests of another Person which satisfies and/or is conducted in
accordance with the following requirements:
(a) Such acquisition is of a business or Person engaged in a
line of business which is compatible with, or complementary to, the
business of the Company, or is engaged in a business using systems or
techniques not unlike those of the Company or any Subsidiary;
15
23
EXHIBIT 10.1
(b) The Company shall have delivered to the Agent and the
Banks not less than thirty (30) nor more than ninety (90) days prior to
the date of such acquisition, notice of such acquisition together with
Pro Forma Projected Financial Information;
(c) Both immediately before and after such acquisition no
Default or Event of Default shall have occurred and be continuing;
(d) The board of directors (or other Person(s) exercising
similar functions) of the seller of the assets or issuer of the shares
of stock or other ownership interests being acquired shall not have
disapproved such transaction or recommended that such transaction be
disapproved; and
(e) All governmental, quasi-governmental, agency, regulatory
or similar licenses, authorizations, exemptions, qualifications,
consents and approvals necessary or appropriate under any laws
applicable to Company or any of its Subsidiaries, or the acquisition
target for or in connection with the proposed acquisition and all
necessary or appropriate non-governmental and other third-party
approvals which, in each case, are material to such acquisition shall
have been obtained, and all necessary or appropriate declarations,
registrations or other filings with any court, governmental or
regulatory authority, securities exchange or any other person have been
made, and evidence thereof satisfactory in form and substance to Agent
and the Majority Banks shall have been delivered, or caused to have
been delivered, by Company to Agent;
(f) There are no actions, suits or proceedings pending or, to
the knowledge of Company threatened against or affecting the
acquisition target in any court or before or by any governmental
department, agency or instrumentality, an adverse decision in which
would materially adversely affect the financial condition of the
acquisition target or the ability of the target company to enter into
or perform its obligations in connection with the proposed acquisition,
nor are any actions, suits, or proceedings pending, or to the knowledge
of Company threatened against Company or any of its Subsidiaries which
would materially adversely affect the ability of the Company or any of
its Subsidiaries to enter into or perform their respective obligations
in connection with the proposed acquisition;
(g) The Company shall have delivered or caused to be delivered
to the Agent evidence that the Company will, as of the effective date
of the acquisition (and giving effect thereto), be in compliance with
Section 7.23 hereof (mutatis mutandis);
(h) The Company shall have delivered or caused to be delivered
to the Agent such information as any Bank may reasonably request to
evidence that the Company will, as of the effective date of the
acquisition (and giving effect thereto), be in compliance with Section
7.18 hereof (mutatis mutandis);
16
24
EXHIBIT 10.1
(i) The Company shall have delivered or caused to be delivered
to Agent a list of any new Liens resulting from the acquisition, which
Liens shall be Liens permitted pursuant to Section 9.2 hereof; and
(j) In the event that value of such proposed acquisition,
computed on the basis of total acquisition consideration paid or
incurred, or to be paid or incurred, by the Company or the acquiring
Subsidiary with respect thereto, including all Debt (other than trade
payables and other liabilities which do not constitute Debt for money
borrowed incurred in the ordinary course of business) which is assumed
or to which such assets, businesses or ownership interests or
shares, or any Person so acquired, is subject (but excluding from the
calculation of the value of such acquisition the value of any common
or preferred shares transferred as a part of such acquisition) is
greater than or equal to ten percent (10%) of Adjusted Consolidated
Tangible Net Worth as of the Applicable Evaluation Date, then subject
to the satisfaction by the Company of the Special Conditions.
"Permitted Investments" shall mean with respect to any Person:
(a) Governmental Obligations;
(b) Obligations of a state of the United States, the District
of Columbia or any possession of the United States, or any political
subdivision thereof, which are described in Section 103(a) of the
Internal Revenue Code and are graded in any of the highest three (3)
major grades as determined by at least one Rating Agency; or secured,
as to payments of principal and interest, by a letter of credit
provided by a financial institution or insurance provided by a bond
insurance company which in each case is itself or its debt is rated in
one of the highest three (3) major grades as determined by at least one
Rating Agency;
(c) Banker's acceptances, commercial accounts, demand deposit
accounts, certificates of deposit, or depository receipts issued by or
maintained with any Bank or a bank, trust company, savings and loan
association, savings bank or other financial institution whose deposits
are insured by the Federal Deposit Insurance Corporation and whose
reported capital and surplus equal at least $250,000,000, provided that
such minimum capital and surplus requirement shall not apply to demand
deposit accounts maintained by the Company or any of its Subsidiaries
in the ordinary course of business;
(d) Commercial paper rated at the time of purchase within the
two highest classifications established by not less than two Rating
Agencies, and which matures within 270 days after the date of issue;
(e) Secured repurchase agreements against obligations itemized
in paragraph (a) above, and executed by a bank or trust company or by
members of the association of primary dealers or other recognized
dealers in United States government securities, the market value of
which must be maintained at levels at least equal to the amounts
advanced; and
17
25
EXHIBIT 10.1
(f) Any fund or other pooling arrangement which exclusively
purchases and holds the investments itemized in (a) through (e) above.
"Permitted Liens" shall mean with respect to any Person:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of such
Person in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's liens or other like Liens arising in the
ordinary course of business which are not overdue for a period of more
than 60 days or which are being contested in good faith by
appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements, in an aggregate amount for
all such items not to exceed $4,000,000 at any one time;
(d) deposits to secure (i) the performance of bids, trade
contracts (other than for borrowed money), statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature at any one time or (ii) the performance of leases permitted
hereunder, in each case given or incurred on terms, in amounts and
otherwise in the ordinary course of business, but in an aggregate
amount at any time outstanding for all such items under clauses (i) and
(ii) of this subparagraph not to exceed seven and one-half percent
(7-1/2%) of Adjusted Consolidated Tangible Net Worth as of the
Applicable Evaluation Date; and
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of such
Person.
"Permitted Subordinated Debt" shall mean (a) the Subordinated Debt and
(b) any other unsecured Debt created, issued or incurred by the Company that (i)
has a stated maturity date extending beyond the Revolving Credit Maturity Date
in effect as of the date such Debt is incurred, (ii) has no amortization (in the
case of public Debt) and (in the case of all other Debt) has an average life to
maturity which exceeds the maturity of the Revolving Credit as then in effect,
(iii) has terms that are no more restrictive than the terms of this Agreement
and (iv) is subordinated in right of payment and priority to the Indebtedness on
terms and conditions satisfactory to the Agent and the Majority Banks; provided
that subordination provisions substantially in the form of those contained in
the Subordinated Debt Documents (but only as to additional public Debt) or in
the form attached hereto as Exhibit J shall be deemed to be satisfactory to
Agent and the Majority Banks hereunder.
18
26
EXHIBIT 10.1
"Person" shall mean a natural person, corporation, limited liability
company, partnership, limited liability partnership, trust, incorporated or
unincorporated organization, joint venture, joint stock company, or a government
or any agency or political subdivision thereof or other entity of any kind.
"Pledge Agreement" shall mean the Pledge Agreement executed and
delivered by the Company and its Domestic Significant Subsidiaries in favor of
the Agent in connection with the Original Credit Agreement or to be executed and
delivered pursuant to Section 8.21 hereof, as amended or otherwise modified from
time to time.
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest which
is equal to the sum of the Margin plus the greater of (i) the Prime Rate, and
(ii) the Alternate Base Rate.
"Prime Rate" shall mean the per annum rate of interest announced by the
Agent, at its main office from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Agent to any of its customers), which Prime Rate shall change
simultaneously with any change in such announced rate.
"Prior Credit Agreement" is defined in Recital A.
"Pro Forma Projected Financial Information" shall mean, as to any
proposed acquisition, a statement executed by a Responsible Officer of the
Company (supported by reasonable detail) setting forth the total consideration
to be paid or incurred in connection with the proposed acquisition and, pro
forma combined projected financial information for the Company and its
consolidated Subsidiaries and the acquisition target (if applicable), consisting
of projected balance sheets as of the proposed effective date of the acquisition
or the closing date and as of the end of at least the next succeeding five (5)
fiscal years of Company following the acquisition and projected statements of
income for each of those years, including sufficient detail to permit
calculation of the amounts and the ratios described in Sections 8.9 through 8.13
hereof, as projected as of the effective date of the acquisition and for those
fiscal years and accompanied by (i) a statement setting forth a calculation of
the ratios and amounts so described, (ii) a statement in reasonable detail
specifying all material assumptions underlying the projections and (iii) such
other information as any Bank shall reasonably request.
"Purchasing Lender" shall have the meaning set forth in Section 12.8.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Bank in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" means any Swing Line Advance which bears interest
at the Quoted Rate.
19
27
EXHIBIT 10.1
"Rating Agency" shall mean ▇▇▇▇▇'▇ Investor Services, Standard and
Poor's Ratings Group or any other nationally recognized statistical rating
organization which is acceptable to the Agent.
"Reaffirmation of Certain Loan Documents" shall mean the Reaffirmation
of Certain Loan Documents, substantially in the form of Exhibit L, as executed
and delivered by the Company and the Significant Subsidiaries, as amended or
otherwise modified from time to time.
"Reimbursement Obligation(s)" shall mean the obligation of an Account
Party or Account Parties under each Letter of Credit Agreement to reimburse the
Issuing Bank for each payment made by the Issuing Bank under the Letter of
Credit issued pursuant to such Letter of Credit Agreement, together with all
other sums, fees, charges and amounts which may be owing to the Issuing Bank
under such Letter of Credit Agreement.
"Request for Revolving Credit Advance" shall mean a Request for
Revolving Credit Advance issued by Company under Section 2.3 of this Agreement
in the form annexed hereto as Exhibit A, as amended or otherwise modified.
"Request for Swing Line Advance" shall mean a Request for Swing Line
Advance issued by Company under Section 4.3 of this Agreement in the form
attached hereto as Exhibit D, as amended or otherwise modified.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and bylaws, the partnership agreement or other organizational or
governing documents of such Person and any law, treaty, rule or regulation or
determination of an arbitration or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" shall mean the chief executive officer or the
president of the Company, or any other officer having substantially the same
authority and responsibility; or with respect to compliance with financial
covenants, the chief financial officer or the treasurer of the Company, or any
other officer having substantially the same authority and responsibility.
"Restated Articles" is defined in the definition of Initial Transaction
Documents.
"Revolving Credit" shall mean the revolving credit loan to be advanced
to the Company by the Banks pursuant to Article 2 hereof, in an aggregate amount
(subject to the terms hereof), not to exceed, at any one time outstanding, the
Revolving Credit Aggregate Commitment.
"Revolving Credit Advance" shall mean a borrowing requested by Company
and made by the Banks under Section 2.1 of this Agreement, including without
limitation any readvance, refunding or conversion of such borrowing pursuant to
Section 2.3 hereof and any advance in respect of a Letter of Credit under
Section 3.6 hereof, and shall include, as applicable, a Eurocurrency-based
Advance and/or a Prime-based Advance.
20
28
EXHIBIT 10.1
"Revolving Credit Aggregate Commitment" shall mean Forty Five Million
Dollars ($45,000,000), subject to reduction or termination under Section 2.8 or
10.2 hereof, minus the aggregate amount of the Environmental Reserve.
"Revolving Credit Facility Fee" shall mean the fees payable to Agent
for distribution to the Banks pursuant to Section 2.6 hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
July 1, 2003, as such date may be extended from time to time pursuant to Section
2.9 hereof, and (ii) the date on which the Revolving Credit Aggregate Commitment
shall be terminated pursuant to Section 2.8 or Section 10.2 hereof.
"Revolving Credit Notes" shall mean the revolving credit notes
described in Section 2.1 hereof, made by Company to each of the Banks in the
form annexed to this agreement as Exhibit B, as such notes may be amended or
supplemented from time to time, and any other notes issued in substitution,
replacement or renewal thereof from time to time.
"Securities Purchase Agreement" shall mean the Amended and Restated
Securities Purchase Agreement dated as of July 31, 1997 by and among the Parent,
the Company, ▇▇-▇▇▇▇▇▇, the ▇▇▇▇▇▇▇ Subordinated Debt Fund, L.P. and Equity
Partners, as amended from time to time in accordance with the terms of this
Agreement.
"Security Agreement" shall mean the Security Agreement executed and
delivered by the Company and each Domestic Significant Subsidiary in favor of
the Agent in connection with the Original Credit Agreement, or to be executed
and delivered pursuant to Section 8.21 hereof, as amended or otherwise modified
from time to time.
"Senior Funded Debt" shall mean, as of any date of determination,
Consolidated Funded Debt other than Subordinated Debt.
"Significant Subsidiary(ies)" shall mean, as of any date of
determination, any Subsidiary which has total assets in excess of $50,000 (or,
in the case of a Foreign Significant Subsidiary (the equivalent in any foreign
currency) determined by Agent as of the end of the most recent fiscal quarter of
the Company.
"Special Conditions" shall mean those special terms and conditions
required to be satisfied prior to or concurrently with the consummation of a
Permitted Acquisition, as follows:
(a) the Company shall have delivered or caused to be delivered
to Agent and each of the Banks not less than thirty (30) nor more than
ninety (90) days prior to the date of such acquisition, a draft copy of
the letter of intent and, when available, all other material
acquisition documents (including, as soon as available, a copy of the
purchase agreement) to be executed and delivered pursuant thereto;
21
29
EXHIBIT 10.1
(b) the Company shall have delivered or caused to be delivered
to Agent and each of the Banks not less than thirty (30) nor more than
ninety (90) days prior to the date of such acquisition, detail setting
forth the acquisition price with supporting documentation, the
acquisition target's most recent audited financial statements, and
historical financial information (including income statement, balance
sheet and cash flows) covering at least three complete fiscal years of
the acquisition target prior to the effective date of the acquisition
or the entire credit history of the acquisition target, whichever
period is shorter (provided, however, that, if the financial
information referred to in this subparagraph (e) is not available,
Company shall furnish Agent with financial information otherwise
reasonably satisfactory to the Majority Banks, and provided further
that, to the extent following the delivery of such financial statements
(but prior to such acquisition) there shall have occurred a material
adverse change in the financial condition of the acquisition target (or
in the condition, financial or otherwise, of the business, results or
operations thereof), the Company shall furnish updated financial
information to Agent and the Banks which shall be entitled to reapprove
such acquisition under subparagraph (e) hereof); and
(c) Prior to its consummation, the Majority Banks shall have
approved in writing the proposed acquisition.
"Subordinated Debt" shall mean Debt of the Company and other
obligations under the Subordinated Debt Documents and any other Debt of the
Company which has been subordinated in right of payment and priority to the
Indebtedness, all on terms and conditions satisfactory to the Agent and the
Banks.
"Subordinated Debt Documents" shall mean and include (a) the
Subordinated Notes, and (b) any other documents evidencing Subordinated Debt, in
each case, as the same may be amended, modified or supplemented from time to
time in compliance with the terms of this Agreement.
"Subordinated Notes" shall mean the unsecured eleven and one quarter
percent (11.25%) Senior Subordinated Notes, due 2008, issued by the Company
pursuant to the Indenture (the "Indenture"), to be dated as of June 23, 1998
between the Company and United States Trust Company of New York, as trustee,
as amended (subject to the terms hereof) from time to time.
"Subordination Agreement" shall mean the Subordination Agreement dated
as of July 31, 1997 by the Whitney Subordinated Debt Fund, L.P., the Parent,
Equity Partners, the other Subordinated Creditors (as defined therein), the
Company and ▇▇-▇▇▇▇▇▇ in favor of the Agent, for and on behalf of the Banks, as
the same may be amended or otherwise modified from time to time in compliance
with the terms thereof and of this Agreement.
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, business trust, limited liability company or any other business
entity of which more than fifty percent (50%) of the outstanding voting stock,
share capital, membership or other interests, as the case may be, is owned
either directly or indirectly by any Person or one or more of its Subsidiaries,
or the management of which is otherwise controlled, directly, or indirectly
through one or more
22
30
EXHIBIT 10.1
intermediaries, or both, by any Person and/or its Subsidiaries. Unless otherwise
specified to the contrary herein, Subsidiary(ies) shall refer to the Company's
Subsidiary(ies).
"Super-majority Banks" shall mean at any time Banks holding 75% of the
aggregate principal amount of the Indebtedness then outstanding under the Notes
(provided that, for purposes of determining Super-majority Banks hereunder,
Indebtedness outstanding under the Swing Line Notes shall be allocated among the
Banks based upon their respective Percentages), or, if no Indebtedness is then
outstanding, Banks holding 75% of the Percentages.
"Swing Line Advance" shall mean a borrowing made by Swing Line Bank to
Company pursuant to Section 4.1 hereof.
"Swing Line Bank" shall mean Comerica Bank in its capacity as lender
under Article 4 of this Agreement.
"Swing Line Credit" shall mean the revolving credit loan to be advanced
to the Company by the Swing Line Bank pursuant to Article 4 hereof, in an
aggregate amount (subject to the terms hereof), not to exceed, at any one time
outstanding, the amount set forth in Section 4.1.
"Swing Line Note" shall mean the swing line note described in Section
4.1 hereof, made by Company to Swing Line Bank in the form annexed hereto as
Exhibit E, as such Note may be amended or supplemented from time to time, and
any notes issued in substitution, replacement or renewal thereof from time to
time.
"Transaction Documents" shall mean collectively, this Agreement, the
Notes, the other Loan Documents, the Subordinated Debt Documents, Initial
Acquisition Documents and the National Dynamics Acquisition Documents.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code of any applicable state, and, unless specified otherwise the Uniform
Commercial Code as in effect in the State of Michigan.
"Whitney Subordinated Debt" shall mean the Subordinated Debt as defined
under the Prior Credit Agreement.
2. REVOLVING CREDIT
2.1 Revolving Credit Commitment. Subject to the terms and conditions of
this Agreement (including Section 2.3 hereof), each Bank severally and for
itself alone agrees to make Advances of the Revolving Credit to Company from
time to time on any Business Day during the period from the Effective Date
hereof until (but excluding) the Revolving Credit Maturity Date in an aggregate
amount not to exceed at any one time outstanding each such Bank's Percentage of
the Revolving Credit Aggregate Commitment. All of such Advances hereunder shall
be evidenced by the
23
31
EXHIBIT 10.1
Revolving Credit Notes, under which advances, repayments and readvances may be
made, subject to the terms and conditions of this Agreement.
2.2 Accrual of Interest and Maturity. The Revolving Credit Notes, and
all principal and interest outstanding thereunder, shall mature and become due
and payable in full on the Revolving Credit Maturity Date, and each Advance
evidenced by the Revolving Credit Notes from time to time outstanding hereunder
shall, from and after the date of such Advance, bear interest at its Applicable
Interest Rate. The amount and date of each Revolving Credit Advance, its
Applicable Interest Rate, its Interest Period, and the amount and date of any
repayment shall be noted on Agent's records, which records may be kept
electronically and which will be conclusive evidence thereof, absent manifest
error; provided, however, that any failure by the Agent to record any such
information shall not relieve Company of its obligation to repay the outstanding
principal amount of such Advance, all interest accrued thereon and any amount
payable with respect thereto in accordance with the terms of this Agreement and
the Loan Documents.
2.3 Requests for Advances and Requests for Refundings and Conversions
of Revolving Credit Advances. Company may request a Revolving Credit Advance,
refund any Revolving Credit Advance in the same type of Revolving Credit Advance
or convert any Revolving Credit Advance to any other type of Revolving Credit
Advance only after delivery to Agent of a Request for Revolving Credit Advance
executed by a person authorized by the Company to make such requests on behalf
of Company subject to the following and to the remaining provisions hereof:
(a) each such Request for Revolving Credit Advance shall set
forth the information required on the Request for Revolving Credit
Advance including without limitation:
(i) the proposed date of Revolving Credit
Advance, which must be a Business Day;
(ii) whether the Revolving Credit Advance is a
refunding or conversion of an outstanding
Revolving Credit Advance; and
(iii) whether such Revolving Credit Advance is to
be a Prime-based Advance or a
Eurocurrency-based Advance, and, except in
the case of a Prime-based Advance, the
Interest Period applicable thereto;
(b) each such Request for Revolving Credit Advance shall be
delivered to Agent by 11:00 a.m. (Detroit time) three (3) Business Days
prior to the proposed date of Revolving Credit Advance, except in the
case of a Prime-based Advance, for which the Request for Revolving
Credit Advance must be delivered by 10 a.m. (Detroit time) on such
proposed date;
(c) the principal amount of such requested Revolving Credit
Advance, plus the principal amount of all other Advances then
outstanding hereunder, plus the Letter of Credit
24
32
EXHIBIT 10.1
Obligations, less the principal amount of any outstanding Swing Line
Advance or Revolving Credit Advance to be refunded by the requested
Revolving Credit Advance shall not exceed the then applicable Revolving
Credit Aggregate Commitment;
(d) (x) in the case of a Prime-based Advance, the principal
amount of the initial funding of such Advance, as opposed to any
refunding or conversion thereof, shall be at least One Million Dollars
($1,000,000) and (y) in the case of a Eurocurrency-based Advance, the
principal amount of such Advance, plus the amount of any other
outstanding Indebtedness under this Agreement to be then combined
therewith having the same Interest Period shall be at least Two Million
Dollars ($2,000,000) and at any one time there shall not be in effect
more than four (4) Interest Periods with respect to the Revolving
Credit;
(e) each Request for Revolving Credit Advance shall constitute
and include a certification by the Company as of the date thereof that:
(i) both before and after the Revolving Credit
Advance, the obligations of the Company and
the Guarantors set forth in this Agreement
and the other Loan Documents, as applicable,
are valid, binding and enforceable
obligations of such parties;
(ii) to the best knowledge of Company all
conditions to Advances of the Revolving
Credit have been satisfied;
(iii) there is no Default or Event of Default in
existence, and none will exist upon the
making of the Advance;
(iv) the representations and warranties contained
in this Agreement and the other Loan
Documents (except in the case of refundings
or conversions of outstanding Advances) are
true and correct in all material respects
and shall be true and correct in all
material respects as of and immediately
after the making of the Advance; and
(v) the execution of such Revolving Credit
Advance will not violate the material terms
and conditions of any material contract,
agreement or other borrowing of Company or
any of its Subsidiaries.
Agent, acting on behalf of the Banks, may, at its option, lend under
this Section 2 upon the telephone request of an authorized officer of Company
and, in the event Agent, acting on behalf of the Banks, makes any such Advance
upon a telephone request, the requesting officer shall, if so requested by
Agent, fax to Agent, on the same day as such telephone request, a Request for
Advance. Company hereby authorizes Agent to disburse Advances under this Section
2.3 pursuant to the telephone instructions of any person purporting to be a
person identified by name on a written list of persons authorized by the Company
to make Requests for Advance on behalf of the Company. Notwithstanding the
foregoing, the Company acknowledges that Company shall bear all risk of loss
25
33
EXHIBIT 10.1
resulting from disbursements made upon any telephone request. Each telephone
request for an Advance shall constitute a certification of the matters set forth
in the Request for Advance form as of the date of such requested Advance.
2.4 Disbursement of Revolving Credit Advances.
(a) Upon receiving any Request for a Revolving Credit Advance
from Company under Section 2.3 hereof, Agent shall promptly notify each
Bank by wire, telecopy, telex or by telephone (confirmed by wire,
telecopy or telex) of the amount of such Revolving Credit Advance to be
made and the date such Advance is to be made by said Bank pursuant to
its Percentage of the Revolving Credit Advance. Unless such Bank's
commitment to make Revolving Credit Advances hereunder shall have been
suspended or terminated in accordance with this Agreement, each Bank
shall send the amount of its Percentage of the Advance in same day
funds in Dollars to Agent at the office of Agent located at One Detroit
Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ not later
than 3:00 p.m. (Detroit time) on the date of such Advance.
(b) Subject to submission of a Request for Revolving Credit
Advance delivered in accordance with Section 2.3 hereof by Company
without exceptions noted in the compliance certification therein and to
the other terms and conditions hereof, Agent shall make available to
Company the aggregate of the amounts so received by it from the Banks
under this Section 2.4, in like funds, not later than 4:00 p.m.
(Detroit time) on the date of such Revolving Credit Advance by credit
to an account of Company maintained with Agent or to such other account
or third party as Company may reasonably direct.
(c) Unless Agent shall have been notified by any Bank prior to
the date of any proposed Revolving Credit Advance that such Bank does
not intend to make available to Agent such Bank's Percentage of the
Revolving Credit Advance, Agent may assume that such Bank has made such
amount available to Agent on such date, as aforesaid and may, in its
sole discretion and without obligation to do so, in reliance upon such
assumption, make available to Company a corresponding amount. If such
amount is not in fact made available to Agent by such Bank in
accordance with Section 2.4(a), as aforesaid, Agent shall be entitled
to recover such amount on demand from such Bank. If such Bank does not
pay such amount forthwith upon Agent's demand therefor, the Agent shall
promptly notify Company, and Company shall pay such amount to Agent.
Agent shall also be entitled to recover from such Bank or from Company,
as the case may be but without duplication, interest on such amount in
respect of each day from the date such amount was made available by
Agent to Company to the date such amount is recovered by Agent, at a
rate per annum equal to:
(i) in the case of such Bank, the Federal Funds Effective
Rate for the first two (2) Business Days such amount
remains unpaid and at the rate of interest applicable
to the Revolving Credit Advances thereafter; or
26
34
EXHIBIT 10.1
(ii) in the case of Company, the rate of interest then
applicable to the Revolving Credit Advance.
The obligation of any Bank to make any Revolving Credit Advance
hereunder shall not be affected by the failure of any other Bank to
make any Revolving Credit Advance hereunder, and no Bank shall have any
liability to the Company, the Agent, any other Bank, or any other party
for another Bank's failure to make any loan or Revolving Credit Advance
hereunder.
2.5 Prime-based Advance in Absence of Election or Upon Default. If, as
to any outstanding Eurocurrency-based Advance, Agent has not received payment on
the last day of the Interest Period applicable thereto, or does not receive a
timely Request for Revolving Credit Advance meeting the requirements of Section
2.3 hereof with respect to the refunding or conversion of such Advance, or,
subject to Section 5.6 hereof, if on such day a Default or Event of Default
shall exist, the principal amount thereof which is not then prepaid shall be
converted automatically to a Prime-based Advance and the Agent shall thereafter
promptly notify Company of said action.
2.6 Revolving Credit Facility Fee. From the Effective Date to the
Revolving Credit Maturity Date, the Company shall pay to the Agent on behalf of
Banks a Revolving Credit Facility Fee quarterly in arrears commencing October 1,
1998 (in respect of the prior fiscal quarter or portion thereof), and on the
first day of each fiscal quarter thereafter. The Revolving Credit Facility Fee
shall be the sum of the Applicable Facility Fee Percentage times the Revolving
Credit Aggregate Commitment (whether used or unused) then in effect without
giving effect to any reductions therein based on the amount of the Environmental
Reserve, computed on a daily basis. The Revolving Credit Facility Fee shall be
computed on the basis of a year of three hundred sixty (360) days and assessed
for the actual number of days elapsed. Whenever any payment of the Revolving
Credit Facility Fee shall be due on a day which is not a Business Day, the date
for payment thereof shall be extended to the next Business Day. Upon receipt of
such payment, Agent shall make prompt payment to each Bank of its share of the
Revolving Credit Facility Fee based upon its respective Percentage. It is
expressly understood that the Revolving Credit Facility Fees described in this
Section are not refundable under any circumstances.
2.7 Reduction of Indebtedness; Revolving Credit Aggregate Commitment.
If at any time and for any reason the aggregate principal amount of Swing Line
Advances and Revolving Credit Advances hereunder to Company, plus the Letter of
Credit Obligations which shall be outstanding at such time, shall exceed the
Revolving Credit Aggregate Commitment then in effect, the Company shall
immediately reduce any pending request for an Advance on such day by the amount
of such excess and, to the extent any excess remains thereafter, immediately
repay an amount of the Indebtedness equal to such excess and, to the extent such
Indebtedness consists of Letter of Credit Obligations, provide cash collateral
on the basis set forth in Section 10.2 hereof. Company acknowledges that, in
connection with any repayment required hereunder, it shall also be responsible
for the reimbursement of any prepayment or other costs required under Section
12.1 hereof; provided, however, that Company shall, in order to reduce any such
prepayment costs and expenses, first prepay such portion of the Indebtedness
then carried as a Prime-based Advance, if any.
27
35
EXHIBIT 10.1
2.8 Optional Reduction or Termination of Revolving Credit Aggregate
Commitment. The Company may, upon at least five (5) Business Days' prior written
notice to Agent, permanently reduce the Revolving Credit Aggregate Commitment in
whole at any time, or in part from time to time, without premium or penalty,
provided that: (i) each partial reduction of the Revolving Credit Aggregate
Commitment shall be in an aggregate amount equal to at least Two Million Dollars
($2,000,000) or a larger integral multiple of One Million Dollars ($1,000,000);
(ii) each reduction shall be accompanied by the payment of the Revolving Credit
Facility Fee, if any, accrued to the date of such reduction; (iii) the Company
shall prepay in accordance with the terms hereof the amount, if any, by which
the sum of the aggregate unpaid principal amount of Swing Line Advances and
Revolving Credit Advances, plus the Letter of Credit Obligations, exceeds the
then applicable Revolving Credit Aggregate Commitment, taking into account the
aforesaid reductions thereof, together with accrued but unpaid interest on the
principal amount of such prepaid Advances to the date of prepayment; (iv) if the
termination or reduction of the Revolving Credit Aggregate Commitment requires
the prepayment of a Eurocurrency-based Advance or Quoted Rate Advance, the
termination or reduction may be made only on the last Business Day of the then
current Interest Period applicable to such Advance; and (v) no reduction shall
reduce the amount of the Revolving Credit Aggregate Commitment to an amount
which is less than the Letter of Credit Obligations at such time. Reductions of
the Revolving Credit Aggregate Commitment and any accompanying prepayments of
the Revolving Credit Notes shall be distributed by Agent to each Bank in
accordance with such Bank's Percentage thereof, and will not be available for
reinstatement by or readvance to the Company and any accompanying prepayments of
the Swing Line Notes shall be distributed by Agent to the Swing Line Bank and
will not be available for reinstatement by or readvance to the Company. Any
reductions of the Revolving Credit Aggregate Commitment hereunder shall reduce
each Bank's portion thereof proportionately (based upon the applicable
Percentages), and shall be permanent and irrevocable. Any payments made pursuant
to this Section shall be applied first to outstanding Prime-based Advances under
the Revolving Credit, next to Swing Line Advances which bear interest at the
Prime-based Rate, next to Quoted Rate Advances and then to Eurocurrency-based
Advances.
2.9 Extension of Revolving Credit Maturity Date. (a) Provided that no
Default or Event of Default has occurred and is continuing, Company may, by
written notice to Agent (with sufficient copies for each Bank) (which notice
shall be irrevocable and which shall not be deemed effective unless actually
received by Agent) prior to August 1, but not before July 1, of each fiscal
year, request that the Banks extend the then applicable Revolving Credit
Maturity Date to a date that is one year later than the Revolving Credit
Maturity Date then in effect (each such request, a "Request"). Each Bank shall,
not later than August 31st of such fiscal year, give written notice to the Agent
stating whether such Bank is willing to extend the Revolving Credit Maturity
Date as requested. If Agent has received the aforesaid written approvals of such
Request from each of the Banks, then, effective upon the date of Agent's receipt
of all such written approvals from the Banks, as aforesaid, the Revolving Credit
Maturity Date shall be so extended for an additional one year period, the term
Revolving Credit Maturity Date shall mean such extended date and Agent shall
promptly notify the Company that such extension has occurred.
28
36
EXHIBIT 10.1
(b) If (i) any Bank gives the Agent written notice that it is
unwilling to extend the Revolving Credit Maturity Date as requested or (ii) any
Bank fails to provide written approval to Agent of such a Request on or before
August 31st of such fiscal year, then (w) the Banks shall be deemed to have
declined to extend the Revolving Credit Maturity Date, (x) the then-current
Revolving Credit Maturity Date shall remain in effect (with no further right on
the part of Company to request extensions thereof under this Section 2.9), and
(y) the commitments of the Banks to make Advances of the Revolving Credit
hereunder shall terminate on the Revolving Credit Maturity Date then in effect,
and Agent shall promptly notify Company thereof.
3. LETTERS OF CREDIT
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Issuing Bank shall through its Issuing Office, at any time and from
time to time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account Party
accompanied by a duly executed Letter of Credit Agreement, and such other
documentation related to the requested Letter of Credit as the Issuing Bank may
reasonably require, issue Letters of Credit for the account of such Account
Party, in an aggregate amount for all Letters of Credit issued hereunder at any
one time outstanding not to exceed an amount equal to the then applicable
Revolving Credit Aggregate Commitment minus the aggregate principal amount of
Revolving Credit Advances plus Swing Line Advances at such time outstanding plus
the aggregate amount of Reimbursement Obligations which have not reimbursed by
the Company as of such date. Each Letter of Credit shall be in a minimum face
amount of Five Thousand Dollars ($5,000) (or such lesser amount as the Issuing
Bank, in its sole discretion, may permit) and shall have an expiration date not
later than the earlier of (i) twenty four months from the date of issuance
thereof, and (ii) ten (10) Business Days prior to the Revolving Credit Maturity
Date. The submission of all applications and the issuance of each Letter of
Credit hereunder shall be subject in all respects to the Uniform Customs and
Practices for Documenting Credits of the International Chamber of Commerce, 1993
Revisions, ICC Publication No. 500. Each Application for Letter of Credit shall
have noted on the first page thereof, or shall be deemed to have noted thereon:
"Note: This application is entered into in accordance with
that certain Aqua-Chem, Inc. Second Amended and Restated Revolving
Credit Agreement dated as of June 23, 1998, as amended or otherwise
modified from time to time (the "Credit Agreement") among the Banks
signatory thereto, Comerica Bank, as Agent for the Banks and Aqua-Chem,
Inc., and in the event of a conflict between this application and the
Credit Agreement, the terms and conditions of the Credit Agreement
shall govern."
3.2 Conditions to Issuance. No Letter of Credit shall be issued at the
request and for the account of any Account Party unless, as of the date of
issuance of such Letter of Credit:
(a) the face amount of the Letter of Credit requested, plus
the Letter of Credit Obligations, does not exceed an amount equal to
(i) the then applicable Revolving Credit
29
37
EXHIBIT 10.1
Aggregate Commitment minus (ii) the aggregate principal amount of
Revolving Credit Advances and Swing Line Advances at such time
outstanding;
(b) the obligations of Company and the Subsidiaries set forth
in this Agreement and the Loan Documents are valid, binding and
enforceable obligations of Company and each of the Subsidiaries and the
valid, binding and enforceable nature of this Agreement and the other
Loan Documents has not been disputed by Company or any of the
Subsidiaries;
(c) both immediately before and immediately after issuance of
the Letter of Credit requested, no Default or Event of Default exists;
(d) the representations and warranties contained in this
Agreement and the other Loan Documents are true in all material
respects as if made on such date;
(e) the execution of the Letter of Credit Agreement with
respect to the Letter of Credit requested will not violate the terms
and conditions of any material contract, agreement or other borrowing
of Company or any Subsidiary;
(f) the Account Party requesting the Letter of Credit shall
have delivered to Issuing Bank at its Issuing Office (with a copy sent
by Account Party to the Agent), not less than three (3) Business Days
prior to the requested date for issuance (or such shorter time as the
Issuing Bank, in its sole discretion, may permit), the Letter of Credit
Agreement related thereto, together with such other documents and
materials as may be required pursuant to the terms thereof, and the
terms of the proposed Letter of Credit shall be satisfactory to Issuing
Bank and its Issuing Office;
(g) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or restrain
Issuing Bank from issuing the requested Letter of Credit, or any Bank
from taking an assignment of its Percentage thereof pursuant to Section
3.6 hereof, and no law, rule, regulation, request or directive (whether
or not having the force of law) shall prohibit or request that Issuing
Bank refrain from issuing, or any Bank refrain from taking an
assignment of its Percentage of, the Letter of Credit requested or
letters of credit generally;
(h) there shall have been no introduction of or change in the
interpretation of any law or regulation that would make it unlawful or
unduly burdensome for the Issuing Bank to issue or for any Bank to take
an assignment of its Percentage of the requested Letter of Credit, no
declaration of a general banking moratorium by banking authorities in
the United States, Michigan or the respective jurisdictions in which
the Banks, the applicable Account Party and the beneficiary of the
requested Letter of Credit are located (each a "Banking Authority"),
and no establishment of any new material restrictions by any Banking
Authority on transactions involving letters of credit or on banks
materially affecting the issuance of letters of credit by banks; and
30
38
EXHIBIT 10.1
(i) Issuing Bank shall have received the facing fee required
in connection with the issuance of such Letter of Credit pursuant to
Section 3.4(b) hereof.
Each Letter of Credit Agreement submitted to Issuing Bank pursuant hereto shall
constitute the certification by the Company and the Account Party of the matters
set forth in this Section 3.2 (a) through (f). The Issuing Bank shall be
entitled to rely on such certification without any duty of inquiry.
3.3 Notice. The Issuing Bank will deliver to the Agent, concurrently or
promptly following its delivery of any Letter of Credit, a true and complete
copy of each Letter of Credit. Promptly upon its receipt thereof, Agent shall
give notice, substantially in the form attached as Exhibit C, to each Bank of
the issuance of each Letter of Credit, specifying the amount thereof and the
amount of such Bank's Percentage thereof.
3.4 Letter of Credit Fees. Company shall pay to the Agent for
distribution to the Issuing Bank and the Banks in accordance with the
Percentages, Letter of Credit Fees as follows:
(a) A per annum letter of credit fee with respect to the
undrawn amount of each Letter of Credit issued pursuant hereto in the
amount of the Applicable L/C Fee Percentage (determined with reference
to Schedule 1.1 of this Agreement), exclusive of the facing fee to be
paid to Issuing Bank under Section 3.4(b) hereof.
(b) A facing fee of the greater of (i) one eighth percentage
point (1/8%) per annum on the undrawn amount of each Letter of Credit
and (ii) $150.00, to be paid by the Company to the Issuing Bank for its
own account.
(c) If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i)
impose, modify or cause to be deemed applicable any reserve, special
deposit, limitation or similar requirement against letters of credit
issued by or participated in, or assets held by, or deposits in or for
the account of, Issuing Bank or any Bank or (ii) impose on Issuing Bank
or any of the Banks any other condition regarding this Agreement or the
Letters of Credit, and the result of any event referred to in clause
(i) or (ii) above shall be to increase in an amount deemed material by
Issuing Bank or such Bank the cost or expense to Issuing Bank or the
Banks of issuing or maintaining or participating in any of the Letters
of Credit (which increase in cost or expense shall be determined by the
Issuing Bank's or such Bank's reasonable allocation of the aggregate of
such cost increases and expense resulting from such events), then, upon
demand by the Issuing Bank or such Bank, as the case may be, the
Company shall, within thirty days following demand for payment, pay to
Issuing Bank or such Bank, as the case may be, from time to time as
specified by the Issuing Bank or such Bank, additional amounts which
shall be sufficient to compensate the Issuing Bank or such Bank for
such increased cost and expense, together with interest on each such
amount from thirty days after the date demanded until payment in full
thereof at the Prime-based Rate. A certificate as to such increased
cost or expense incurred by the Issuing Bank
31
39
EXHIBIT 10.1
or such Bank, as the case may be, as a result of any event mentioned in
clause (i) or (ii) above, shall be promptly submitted to the Company
and shall be conclusive evidence, absent manifest error, as to the
amount thereof.
(d) All payments by the Company to the Agent for distribution
to the Issuing Bank or the Banks under this Section 3.4 shall be made
in Dollars and in immediately available funds at the principal office
of the Agent or such other office of the Agent as may be designated
from time to time by written notice to the Company by the Agent. The
fees described in clause (a) above shall be nonrefundable under all
circumstances and shall be payable quarterly in advance (or such lesser
period, if applicable, for Letters of Credit issued with stated
expiration dates of less than one year) upon the issuance of each such
Letter of Credit, and shall be calculated on the basis of a 360 day
year and assessed for the actual number of days from the date of the
issuance thereof to the stated expiration thereof.
3.5 Other Letter of Credit Fees. In connection with the Letters of
Credit, and in addition to the Letter of Credit Fees, the Company and the
applicable Account Party shall pay, for the sole account of the Issuing Bank,
standard documentation, administration, payment and cancellation charges
assessed by Issuing Bank or its Issuing Office, at the times, in the amounts and
on the terms set forth or to be set forth from time to time in the standard fee
schedule of Issuing Office in effect from time to time.
3.6 Draws and Demands for Payment Under Letters of Credit.
(a) The Company and each applicable Account Party agree to pay
to the Agent for the account of the Issuing Bank, on the day on which
the Issuing Bank shall honor a draft or other demand for payment
presented or made under any Letter of Credit, an amount equal to the
amount paid by the Issuing Bank in respect of such draft or other
demand under such Letter of Credit and all reasonable expenses paid or
incurred by the Issuing Bank relative thereto. Unless the Company or
the applicable Account Party shall have made such payment
to the Agent for the account of the Issuing Bank on such day, upon each
such payment by the Issuing Bank, the Agent shall be deemed to have
disbursed to the Company, and the Company shall be deemed to have
elected to substitute for its Reimbursement Obligation, a Prime-based
Advance from the Banks in an amount equal to the amount so paid by the
Issuing Bank in respect of such draft or other demand under such Letter
of Credit. Such Prime-based Advance shall be disbursed notwithstanding
any failure to satisfy any conditions for disbursement of any Advance
set forth in Article 2 hereof and, to the extent of the Prime-based
Advance so disbursed, the Reimbursement Obligation of the Company or
the applicable Account Party to the Agent under this Section 3.6 shall
be deemed satisfied.
(b) If the Issuing Bank shall honor a draft or other demand
for payment presented or made under any Letter of Credit, the Issuing
Bank shall provide notice thereof to the Company and the applicable
Account Party on the date such draft or demand is honored, and to each
Bank on such date unless the Company or applicable Account Party shall
have satisfied its Reimbursement Obligation under Section 3.6(a) by
payment to the Agent on
32
40
EXHIBIT 10.1
such date. The Issuing Bank shall further use reasonable efforts to
provide notice to the Company or applicable Account Party prior to
honoring any such draft or other demand for payment, but such notice,
or the failure to provide such notice, shall not affect the rights or
obligations of the Issuing Bank with respect to any Letter of Credit or
the rights and obligations of the parties hereto, including without
limitation the obligations of the Company or applicable Account Party
under Section 3.6(a) hereof.
(c) Upon issuance by the Issuing Bank of each Letter of Credit
hereunder, each Bank shall automatically acquire a pro rata risk
participation interest in such Letter of Credit and related Letter of
Credit Payment based on its respective Percentage. Each Bank, on the
date a draft or demand under any Letter of Credit is honored, shall
make its Percentage share of the amount paid by the Issuing Bank, and
not reimbursed by the Company or applicable Account Party by payment to
the Agent on such day, available in immediately available funds at the
principal office of the Agent for the account of the Issuing Bank. If
and to the extent such Bank shall not have made such pro rata portion
available to the Agent, such Bank, the Company and the applicable
Account Party severally agree to pay to the Issuing Bank forthwith on
demand such amount together with interest thereon, for each day from
the date such amount was paid by the Issuing Bank until such amount is
so made available to the Agent for the account of the Issuing Bank at a
per annum rate equal to the interest rate applicable during such period
to the related Advance disbursed under Section 3.6(a) in respect of the
Reimbursement Obligation of the Company and the applicable Account
Party. If such Bank shall pay such amount to the Agent for the account
of the Issuing Bank together with such interest, such amount so paid
shall constitute a Prime-based Advance by such Bank disbursed in
respect of the Reimbursement Obligation of the Company or applicable
Account Party under Section 3.6(a) for purposes of this Agreement,
effective as of the date such amount was paid by the Issuing Bank. The
failure of any Bank to make its pro rata portion of any such amount
paid by the Issuing Bank available to the Agent for the account of the
Issuing Bank shall not relieve any other Bank of its obligation to make
available its pro rata portion of such amount, but no Bank shall be
responsible for failure of any other Bank to make such pro rata portion
available to the Agent for the account Issuing Bank.
(d) Nothing in this Agreement shall be construed to require or
authorize any Bank other than the Issuing Bank to issue any Letter of
Credit, it being recognized that the Issuing Bank shall be the sole
issuer of Letters of Credit under this Agreement.
3.7 Obligations Irrevocable. The obligations of Company and any Account
Party to make payments to Agent for the account of the Issuing Bank or of the
Banks with respect to Reimbursement Obligations under Section 3.6 hereof, shall
be unconditional and irrevocable and not subject to any qualification or
exception whatsoever, including, without limitation:
(a) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of
Credit Documents");
33
41
EXHIBIT 10.1
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest
in collateral or security, with respect to any of the Letter of Credit
Documents;
(c) The existence of any claim, setoff, defense or other right
which the Company or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons
or entities for whom any such beneficiary or any such transferee may be
acting), the Agent, the Issuing Bank or any other Bank or any other
person or entity, whether in connection with any of the Letter of
Credit Documents, the transactions contemplated herein or therein or
any unrelated transactions;
(d) Any draft or other statement or document presented under
any Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect;
(e) Absent gross negligence or willful misconduct on the part
of the Issuing Bank or Banks, any failure, omission, delay or lack on
the part of the Agent, the Issuing Bank or any other Bank or any party
to any of the Letter of Credit Documents to enforce, assert or exercise
any right, power or remedy conferred upon the Agent, the Issuing Bank,
any other Bank or any such party under this Agreement, any of the Loan
Documents or any of the Letter of Credit Documents, or any other acts
or omissions on the part of the Agent, the Issuing Bank, any other Bank
or any such party; or
(f) Absent gross negligence or willful misconduct on the part
of the Issuing Bank or Banks, any other event or circumstance that
would, in the absence of this Section 3.7, result in the release or
discharge by operation of law or otherwise of Company or any Account
Party from the performance or observance of any obligation, covenant or
agreement contained in Section 3.6.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which Company or any Account Party has or may have
against the beneficiary of any Letter of Credit shall be available hereunder to
Company or any Account Party against the Agent, the Issuing Bank or any other
Bank. Nothing contained in this Section 3.7 shall be deemed to prevent Company
or the Account Parties, after satisfaction in full of the absolute and
unconditional obligations of Company and the Account Parties hereunder, from
asserting in a separate action any claim, defense, set off or other right which
they (or any of them) may have against Agent, the Issuing Bank or any Bank.
3.8 Risk Under Letters of Credit. (a) In the handling of Letters of
Credit and any security therefor, or any documents or instruments given in
connection therewith, and notwithstanding the granting of risk participation
hereunder, the Issuing Bank shall have the sole right to take or refrain from
taking any and all actions under or upon the Letters of Credit.
34
42
EXHIBIT 10.1
(b) Subject to other terms and conditions of this Agreement,
Issuing Bank shall issue the Letters of Credit and shall hold the
documents related thereto in its own name and shall make all
collections thereunder and otherwise administer the Letters of Credit
in accordance with Issuing Bank's regularly established practices and
procedures and, Issuing Bank will have no further obligation with
respect thereto. In the administration of Letters of Credit, Issuing
Bank shall not be liable for any action taken or omitted on the advice
of counsel, accountants, appraisers or other experts selected by
Issuing Bank with due care and Issuing Bank may rely upon any notice,
communication, certificate or other statement from Company, any Account
Party, beneficiaries of Letters of Credit, or any other Person which
Issuing Bank believes to be authentic. Issuing Bank, will, upon
request, furnish the Banks with copies of Letter of Credit Agreements,
Letters of Credit and documents related thereto.
(c) In connection with the issuance and administration of
Letters of Credit and the assignments hereunder, Issuing Bank makes no
representation and shall, subject to Section 3.7 hereof, have no
responsibility with respect to (i) the obligations of Company or any
Account Party or, the validity, sufficiency or enforceability of any
document or instrument given in connection therewith, (ii) the
financial condition of, any representations made by, or any act or
omission of Company, the applicable Account Party or any other Person,
or (iii) any failure or delay in exercising any rights or powers
possessed by Issuing Bank in its capacity as issuer of Letters of
Credit, in the absence of its gross negligence or willful misconduct.
Each of the Banks expressly acknowledge that they have made and will
continue to make their own evaluations of Company's creditworthiness
without reliance on any representation of Issuing Bank or Issuing
Bank's officers, agents and employees.
(d) If at any time Agent or the Issuing Bank shall recover any
part of any unreimbursed amount for any draw or other demand for
payment under a Letter of Credit, or any interest thereon, Agent or the
Issuing Bank, as the case may be, shall receive same for the pro rata
benefit of the Banks in accordance with their respective Percentage
interests therein and shall promptly deliver to each Bank its share
thereof, less such Bank's pro rata share of the costs of such recovery,
including court costs and attorney's fees. If at any time any Bank
shall receive from any source whatsoever any payment on any such
unreimbursed amount or interest thereon in excess of such Bank's
Percentage share of such payment, such Bank will promptly pay over such
excess to Agent, for redistribution in accordance with this Agreement.
3.9 Indemnification. (a) The Company and each Account Party hereby
indemnifies and agrees to hold harmless the Banks, the Issuing Bank and the
Agent, and their respective officers, directors, employees and agents, from and
against any and all claims, damages, losses, liabilities, costs or expenses of
any kind or nature whatsoever which the Banks, the Issuing Bank or the Agent or
any such Person may incur or which may be claimed against any of them by reason
of or in connection with any Letter of Credit, and none of the Issuing Bank, any
Bank or the Agent or any of their respective officers, directors, employees or
agents shall be liable or responsible for: (i) the use which may be made of any
Letter of Credit or for any acts or omissions of any beneficiary in connection
therewith; (ii) the validity, sufficiency or genuineness of documents or of any
35
43
EXHIBIT 10.1
endorsement thereon, even if such documents should in fact prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (iii) payment by the
Issuing Bank to the beneficiary under any Letter of Credit against presentation
of documents which do not strictly comply with the terms of any Letter of Credit
(unless such payment resulted from the gross negligence or willful misconduct of
the Issuing Bank), including failure of any documents to bear any reference or
adequate reference to such Letter of Credit; (iv) any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit; or (v) any
other event or circumstance whatsoever arising in connection with any Letter of
Credit; provided, however, that with respect to subparagraphs (a)(i) through
(a)(v) hereof, Company and Account Parties shall not be required to indemnify
the Issuing Bank, the other Banks and the Agent and such other persons, and the
Issuing Bank shall be liable to the Company and the Account Parties to the
extent, but only to the extent, of any direct, as opposed to consequential or
incidental, damages suffered by Company and the Account Parties which were
caused by the Issuing Bank's gross negligence, willful misconduct or wrongful
dishonor of any Letter of Credit after the presentation to it by the beneficiary
thereunder of a draft or other demand for payment and other documentation
strictly complying with the terms and conditions of such Letter of Credit.
(b) It is understood that in making any payment under a Letter of
Credit the Issuing Bank will rely on documents presented to it under such Letter
of Credit as to any and all matters set forth therein without further
investigation and regardless of any notice or information to the contrary. It is
further acknowledged and agreed that Company or an Account Party may have rights
against the beneficiary or others in connection with any Letter of Credit with
respect to which the Banks are alleged to be liable and it shall be a condition
of the assertion of any liability of the Banks under this Section that Company
or applicable Account Party shall contemporaneously pursue all remedies in
respect of the alleged loss against such beneficiary and any other parties
obligated or liable in connection with such Letter of Credit and any related
transactions.
3.10 Right of Reimbursement. Each Bank agrees to reimburse the Issuing
Bank on demand (by payment to the Agent for the account of the Issuing Bank),
pro rata in accordance with their Percentages, for (i) the reasonable
out-of-pocket costs and expenses of the Issuing Bank to be reimbursed by Company
or any Account Party pursuant to any Letter of Credit Agreement or any Letter of
Credit, to the extent not reimbursed by Company or Account Party and (ii) any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, fees, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against Issuing Bank
(in its capacity as issuer of any Letter of Credit) in any way relating to or
arising out of this Agreement, any Letter of Credit, any documentation or any
transaction relating thereto, or any Letter of Credit Agreement, except to the
extent that such liabilities, losses, costs or expenses were incurred by Issuing
Bank as a result of Issuing Bank's gross negligence or willful misconduct or
wrongful dishonor of any Letter of Credit.
3.11 Existing Letters of Credit. Each Existing Letter of Credit shall
be deemed for all purposes of this Agreement to be a Letter of Credit, and each
application submitted in connection with each Existing Letter of Credit shall be
deemed for all purposes of this Agreement to be a Letter
36
44
EXHIBIT 10.1
of Credit Agreement. On the Effective Date of this Agreement, the Agent shall be
deemed automatically to have sold and transferred, and each other Bank shall be
deemed automatically, irrevocably, and unconditionally to have purchased and
received from the Agent, without recourse or warranty, an undivided interest and
participation (on the terms set forth herein), to the extent of such other
Bank's Percentage, in each Existing Letter of Credit and the applicable
reimbursement obligations with respect thereto and any security therefor or
guaranty pertaining thereto. Notwithstanding the foregoing, Letter of Credit
Fees paid under the Prior Credit Agreement shall not be recalculated,
redistributed or reallocated by Company, Agent or the Banks.
4. SWING LINE CREDIT
4.1 Swing Line Advances. The Swing Line Bank shall, on the terms and
subject to the conditions hereinafter set forth (including Section 4.3), make
one or more advances (each such advance being a "Swing Line Advance") to Company
from time to time on any Business Day during the period from the date hereof to
(but excluding) the Revolving Credit Maturity Date in an aggregate amount not to
exceed Four Million Dollars ($4,000,000) at any time outstanding; provided,
however, that after giving effect to all Swing Line Advances and all Revolving
Credit Advances requested to be made on such date, the sum of the aggregate
principal amount of all outstanding Revolving Credit Advances, Swing Line
Advances and Letter of Credit Obligations shall not exceed the then applicable
Revolving Credit Aggregate Commitment. All Swing Line Advances shall be
evidenced by the Swing Line Note, under which advances, repayments and
readvances may be made, subject to the terms and conditions of this Agreement.
Each Swing Line Advance shall mature and the principal amount thereof shall be
due and payable by Company on the last day of the Interest Period applicable
thereto. In no event whatsoever shall any outstanding Swing Line Advance be
deemed to reduce, modify or affect any Bank's commitment to make Revolving
Credit Advances based upon its Percentage.
4.2 Accrual of Interest; Margin Adjustments. Each Swing Line Advance
shall, from time to time after the date of such Advance, bear interest at its
Applicable Interest Rate. The amount and date of each Swing Line Advance, its
Applicable Interest Rate, its Interest Period, and the amount and date of any
repayment shall be noted on Agent's records, which records will be conclusive
evidence thereof, absent manifest error; provided, however, that any failure by
the Agent to record any such information shall not relieve Company of its
obligation to repay the outstanding principal amount of such Advance, all
interest accrued thereon and any amount payable with respect thereto in
accordance with the terms of this Agreement and the Loan Documents.
4.3 Requests for Swing Line Advances. Company may request a Swing Line
Advance only after delivery to Swing Line Bank of a Request for Swing Line
Advance executed by a person authorized by the Company to make such requests on
behalf of Company, subject to the following and to the remaining provisions
hereof:
(a) each such Request for Swing Line Advance shall set forth
the information required on the Request for Swing Line Advance
including without limitation:
37
45
EXHIBIT 10.1
(i) the proposed date of Swing Line Advance,
which must be a Business Day;
(ii) whether such Swing Line Advance is to be a
Prime-based Advance or Quoted Rate Advance; and
(iii) the duration of the Interest Period
applicable thereto;
(b) each such Request for Swing Line Advance shall be
delivered to Swing Line Bank by 12:00 p.m. (Detroit time) on the
proposed date of the Swing Line Advance;
(c) the principal amount of such requested Swing Line Advance,
plus the principal amount of all other Revolving Credit Advances and
Swing Line Advances then outstanding hereunder, plus the Letter of
Credit Obligations, shall not exceed the then applicable Revolving
Credit Aggregate Commitment;
(d) the principal amount of such Swing Line Advance shall be
at least Two Hundred Fifty Thousand Dollars ($250,000);
(e) each Request for Swing Line Advance, once delivered to
Swing Line Bank, shall not be revocable by Company, and shall
constitute and include a certification by the Company as of the date
thereof that:
(i) both before and after the Swing Line
Advance, the obligations of the Company and the Guarantors set
forth in this Agreement and the Loan Documents, as applicable,
are valid, binding and enforceable obligations of such
parties;
(ii) to the best knowledge of Company all
conditions to Advances have been satisfied;
(iii) there is no Default or Event of Default in
existence, and none shall exist upon the making of the Swing
Line Advance; and
(iv) the representations and warranties
contained in this Agreement and the Loan Documents are true
and correct in all material respects and shall be true and
correct in all material respects as of and immediately after
the making of the Swing Line Advance.
Swing Line Bank shall promptly deliver to Agent by telecopier a copy of any
Request for Swing Line Advance received.
Swing Line Bank, may, at its option, lend under this Section 4.3 upon
the telephone request of an authorized officer of Company and, in the event
Swing Line Bank makes any such Advance
38
46
EXHIBIT 10.1
upon a telephone request, the requesting officer shall, if so requested by Swing
Line Bank, fax to Swing Line Bank, on the same day as such telephone request, a
Request for Swing Line Advance. Company hereby authorizes Swing Line Bank to
disburse Advances under this Section 4 pursuant to the telephone instructions of
any person purporting to be a person identified by name on a written list of
persons authorized by the Company to make Requests for Advance on behalf of the
Company. Notwithstanding the foregoing, the Company acknowledges that Company
shall bear all risk of loss resulting from disbursements made upon any telephone
request. Each telephone request for an Advance shall constitute a certification
of the matters set forth in the Request for Swing Line Advance form as of the
date of such requested Advance.
4.4 Disbursement of Swing Line Advances. Subject to submission of an
executed Request for Swing Line Advance by Company without exceptions noted in
the compliance certification therein and to the other terms and conditions
hereof, Swing Line Bank shall make available to Company the amount so requested,
in same day funds, not later than 4:00 p.m. (Detroit time) on the date of such
Swing Line Advance by credit to an account of Company maintained with Swing Line
Bank or to such other account or third party as Company may reasonably direct.
Swing Line Bank shall promptly notify Agent of any Swing Line Advance by
telephone, telex or telecopier.
4.5 Refunding of or Participation Interest in Swing Line Advances.
(a) The Swing Line Bank at any time in its sole and absolute
discretion, may on behalf of the Company (which hereby irrevocably
directs the Swing Line Bank to act on its behalf) request each Bank
(including the Swing Line Bank in its capacity as a Bank) to make a
Prime-based Advance of the Revolving Credit in an amount equal to such
Bank's Percentage of the principal amount of the Swing Line Advances
(the "Refunded Swing Line Advances") outstanding on the date such
notice is given; provided that (i) at any time as there shall be a
Swing Line Advance outstanding for more than thirty days, the Swing
Line Bank shall, on behalf of the Company (which hereby irrevocably
directs the Agent to act on its behalf), promptly request each Bank
(including the Swing Line Bank) to make a Revolving Credit Advance in
an amount equal to such Bank's Percentage of the principal amount of
such outstanding Swing Line Advance, (ii) Swing Line Advances may be
prepaid by the Company in accordance with the provisions of Section 5.7
or Section 12.1 hereof and (iii) Quoted Rate Advances which are
converted to Revolving Credit Advances at the request of the Agent at a
time when no Default or Event of Default has occurred and is continuing
shall not be subject to Section 5.7 and no losses, costs or expenses
may be assessed by the Swing Line Bank against the Company or the other
Banks as a consequence of any such conversion covered by this clause
(iii). Unless any of the events described in Section 10.1(j) shall have
occurred (in which event the procedures of paragraph (b) of this
Section 4.5 shall apply) and regardless of whether the conditions
precedent set forth in this Agreement to the making of a Revolving
Credit Advance are then satisfied, each Bank shall make the proceeds of
its Revolving Credit Advance available to the Agent for the ratable
benefit of the Swing Line Bank at the office of the Agent specified in
Section 2.4(a) prior to 11:00 a.m. Detroit time, in funds immediately
available on the Business Day next succeeding the date such
39
47
EXHIBIT 10.1
notice is given. The proceeds of such Revolving Credit Advances shall
be immediately applied to repay the Refunded Swing Line Advances.
(b) If, prior to the making of a Revolving Credit Advance
pursuant to paragraph (a) of this Section 4.5, one of the events
described in Section 10.1(j) shall have occurred, each Bank will, on
the date such Revolving Credit Advance was to have been made, purchase
from the Swing Line Bank an undivided participating interest in the
Refunded Swing Line Advance in an amount equal to its Percentage of
such Refunded Swing Line Advance. Each Bank will immediately transfer
to the Agent, in immediately available funds, the amount of its
participation and upon receipt thereof the Agent will deliver to such
Bank a Swing Line Bank Participation Certificate in the form of Exhibit
F dated the date of receipt of such funds and in such amount.
(c) Each Bank's obligation to make Revolving Credit Advances
and to purchase participation interests in accordance with clauses (a)
and (b) above shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any
setoff, counterclaim, recoupment, defense or other right which such
Bank may have against Swing Line Bank, the Company or any other Person
for any reason whatsoever; (ii) the occurrence or continuance of any
Default or Event of Default; (iii) any adverse change in the condition
(financial or otherwise) of the Company or any other Person; (iv) any
breach of this Agreement by the Company or any other Person; (v) any
inability of the Company to satisfy the conditions precedent to
borrowing set forth in this Agreement on the date upon which such
participating interest is to be purchased; or (vi) any other
circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing. If any Bank does not make available to the Agent
the amount required pursuant to clause (a) or (b) above, as the case
may be, the Agent shall be entitled to recover such amount on demand
from such Bank, together with interest thereon for each day from the
date of non-payment until such amount is paid in full at the Federal
Funds Effective Rate for the first two Business Days and at the
Alternate Base Rate thereafter.
5. MARGIN ADJUSTMENTS; INTEREST PAYMENTS
5.1 Margin Adjustments. Adjustments in the Margin, based on the ratio
of Consolidated Funded Debt to Consolidated EBITDA set forth in the pricing
matrix attached to this Agreement as Schedule 1.1, applicable to
Eurocurrency-based Advances, the Applicable Facility Fee Percentage and the
Applicable L/C Fee Percentage, shall be implemented on a quarterly basis as
follows:
(a) Such adjustments shall be given prospective effect only,
effective (i) as to all Prime-based Advances outstanding hereunder, the
Applicable Facility Fee Percentage and the Applicable L/C Fee
Percentage, upon the required date of delivery of the financial
statements under Sections 8.1(a) and 8.1(b) hereunder, in each case
establishing applicability of the appropriate adjustment, and (ii) as
to each Eurocurrency-based Advance outstanding hereunder, effective
upon the expiration of the applicable Interest Period(s), if any, in
effect on the date of the delivery of such financial statements, in
each case with no retroactivity or
40
48
EXHIBIT 10.1
claw-back. In the event Company fails timely to deliver the financial
statements required under Section 8.1(a) or 8.1(b), then from the date
delivery of such financial statements was required until such financial
statements are delivered, the margins and fee percentages shall be
those set forth under the Level V Column of the pricing matrix attached
to this Agreement as Schedule 1.1.
(b) With respect to Eurocurrency-based Advances outstanding
hereunder, an adjustment hereunder, after becoming effective, shall
remain in effect only through the end of the applicable Interest
Period(s) for such Eurocurrency-based Advances if any; provided,
however, that upon any change in the Margin level then in effect, as
aforesaid, or the occurrence of any other event which under the terms
hereof causes such adjustment no longer to be applicable, then any such
subsequent adjustment or no adjustment, as the case may be, shall be
effective (and said pricing shall thereby be adjusted up or down, as
applicable) with the commencement of each Interest Period following
such change or event, all in accordance with the preceding
subparagraph.
(c) Such Margin adjustments under this Section 5.1 shall be
made irrespective of, and in addition to, any other interest rate
adjustments hereunder.
(d) From the date hereof until the required date of delivery
under Section 8.1(b) of the Company's financial statements for the
fiscal quarter ending June 30, 1998, the margins and fee percentages
shall be those set forth under the Level V column of the pricing matrix
attached to this Agreement as Schedule 1.1.
5.2 Prime-based Interest Payments. Interest on the unpaid balance of
all Prime-based Advances from time to time outstanding shall accrue until paid
at a per annum interest rate equal to the Prime-based Rate, and shall be payable
in immediately available funds quarterly commencing on the first day of the
fiscal quarter next succeeding the fiscal quarter during which the initial
Advance is made and on the first day of each fiscal quarter thereafter. Interest
accruing at the Prime-based Rate shall be computed on the basis of a 360 day
year and assessed for the actual number of days elapsed, and in such computation
effect shall be given to any change in the interest rate resulting from a change
in the Prime-based Rate on the date of such change in the Prime-based Rate.
5.3 Eurocurrency-based Interest Payments. Interest on each
Eurocurrency-based Advance having a related Eurocurrency-Interest Period of 3
months or less shall accrue at its Eurocurrency- based Rate and shall be payable
in immediately available funds on the last day of the Interest Period applicable
thereto. Interest shall be payable in immediately available funds on each
Eurocurrency-based Advance outstanding from time to time having a
Eurocurrency-Interest Period of 6 months or longer, at intervals of 3 months
after the first day of the applicable Interest Period, and shall also be payable
on the last day of the Interest Period applicable thereto. Interest accruing at
the Eurocurrency-based Rate shall be computed on the basis of a 360 day year and
assessed for the actual number of days elapsed from the first day of the
Interest Period applicable thereto to, but not including, the last day thereof.
41
49
EXHIBIT 10.1
5.4 Quoted Rate Advance Interest Payments. Interest on each Quoted Rate
Advance shall accrue at its Quoted Rate and shall be payable in immediately
available funds on the last day of the Interest Period applicable thereto.
Interest accruing at the Quoted Rate shall be computed on the basis of a 360 day
year and assessed for the actual number of days elapsed from the first day of
the Interest Period applicable thereto to, but not including the last day
thereof.
5.5 Interest Payments on Conversions. Notwithstanding anything to the
contrary in Sections 5.2 and 5.3, all accrued and unpaid interest on any Advance
refunded or converted pursuant to Section 2.3 hereof shall be due and payable in
full on the date such Advance is refunded or converted.
5.6 Interest on Default. Notwithstanding anything to the contrary set
forth in Sections 5.2, 5.3 and 5.4, in the event and so long as any Event of
Default shall exist under this Agreement, interest shall be payable daily on the
principal amount of all Advances from time to time outstanding (and, to the
extent delinquent, on all other monetary obligations of Company hereunder and
under the other Loan Documents) at a per annum rate equal to the Applicable
Interest Rate (calculated on the basis of the maximum Margins) in respect of
each such Advance, plus, in the case of Eurocurrency-based Advances and Quoted
Rate Advances, two percent (2%) per annum for the remainder of the then existing
Interest Period, if any, and at all other such times and for all Prime-based
Advances, at a per annum rate equal to the Prime-based Rate, plus two percent
(2%).
5.7 Prepayment of Revolving Credit and Swing Line Advances. Company may
prepay all or part of the outstanding balance of any Prime-based Revolving
Credit Advance(s) at any time, provided that the amount of any partial
prepayment shall be at least Five Hundred Thousand Dollars ($500,000) and the
aggregate balance of Prime-based Revolving Credit Advance(s) remaining
outstanding, if any, shall be at least One Million Dollars ($1,000,000) and the
aggregate amount outstanding under all Swing Line Advances, if any, shall be at
least Two Hundred Fifty Thousand Dollars ($250,000). Company may prepay all or
part of any Eurocurrency-based Revolving Credit Advance (subject to not less
than three (3) Business Days' notice to Agent) only on the last day of the
Interest Period applicable thereto, provided that the amount of any such partial
prepayment shall be at least Five Hundred Thousand Dollars ($500,000), and the
unpaid portion of such Advance which is refunded or converted under Section 2.3
shall be at least Two Million Dollars ($2,000,000). Company may prepay Quoted
Rate Advances only on the last day of the Interest Period applicable thereto.
Any prepayment made in accordance with this Section shall be without premium,
penalty or prejudice to the right to reborrow under the terms of this Agreement.
Any other prepayment of all or any portion of the Revolving Credit, whether by
acceleration, mandatory or required prepayment or otherwise, shall be subject to
Section 12.1 hereof, but otherwise without premium, penalty or prejudice. All
prepayments of Revolving Credit Advances shall be made to the Agent for
distribution ratably to the Banks.
42
50
EXHIBIT 10.1
6. CONDITIONS
The obligations of Banks to make Advances or loans pursuant to this
Agreement and the obligation of the Issuing Bank to issue Letters of Credit are
subject to the following conditions:
6.1 Execution of Notes and this Agreement. Company shall have executed
and delivered to Agent for the account of each Bank, the Revolving Credit Notes,
the Swing Line Note, this Agreement and the other Loan Documents to which it is
a party (including all schedules, exhibits, certificates, opinions, financial
statements and other documents to be delivered pursuant hereto), and such Notes,
and this Agreement and the other Loan Documents shall be in full force and
effect.
6.2 Corporate Authority. Agent shall have received, with a counterpart
thereof for each Bank:
(a) In connection with the Company, a certificate of
Responsible Officer as to:
(i) resolutions of the board of directors of the
Company evidencing approval of the transactions contemplated
by this Agreement and the Notes and authorizing the execution
and delivery thereof and the borrowing of Advances and the
requesting of Letters of Credit hereunder,
(ii) the incumbency and signature of the officers of the
Company executing any Loan Document,
(iii) a certificate of good standing or continued
existence (or the equivalent thereof) from the State of
Delaware, and from every state or other jurisdiction listed on
Schedule 6.2 hereof if issued by such jurisdiction, subject to
the limitations (as to qualification and authorization to do
business) contained in Section 7.1, and
(iv) copies of Company's articles of incorporation and
bylaws or other constitutional documents, as in effect on the
Effective Date;
(b) in connection with each Guarantor, a certificate from an
authorized officer of such Guarantor as to:
(i) resolutions of the board of directors or members or
managers, as the case may be, of each such Guarantor
evidencing approval of the transactions contemplated by the
Loan Documents to which such Guarantor is a party and
authorizing the execution and delivery thereof,
(ii) the incumbency and signature of the officers or
members or managers, as the case may be, of such Guarantor
executing any Loan Document to which such Guarantor is a
party,
43
51
EXHIBIT 10.1
(iii) a certificate of good standing from the state or
other jurisdiction of such Guarantor's incorporation, and from
every state or other jurisdiction in which such Guarantor is
qualified to do business, if issued by such jurisdiction,
subject to the limitations (as to qualification and
authorization to do business) contained in Section 7.1,
hereof, and
(iv) copies of Guarantor's articles of incorporation and
bylaws or other constitutional documents, as in effect on the
Effective Date.
6.3 Reaffirmation of Certain Loan Documents. The Agent shall have
received a Reaffirmation of Certain Loan Documents, including the Pledge
Agreement, the Subsidiary Pledge Agreement, the Parent Pledge Agreement, the
Security Agreement and the Guaranty, in the form of Exhibit L, executed and
delivered by each of the Company, ▇▇-▇▇▇▇▇▇, Parent, the Domestic Significant
Subsidiaries and the Guarantors.
6.4 Real Estate Documentation. (a) With respect each Mortgage executed
and delivered in connection with the Original Credit Agreement, a Reaffirmation
of Certain Loan Documents, if applicable or an amendment to such Mortgage
reflecting the transactions contemplated by this Agreement; and (b) with respect
to each parcel of real property in Nebraska and Texas acquired pursuant to the
National Dynamics Acquisition, (i) a Mortgage in form and substance satisfactory
to Agent and the Banks, together with the other real estate documentation listed
on Schedule 8.21 hereto, and (ii) written environmental audits or risk
assessments acceptable to Agent and the Banks prepared at Company's expense by
an environmental engineer or auditing firm experienced in such matters and
reasonably acceptable to Agent and the Banks.
6.5 Insurance. The Agent shall have received evidence satisfactory to
it that the Company has obtained the insurance policies required by Section 8.5
hereof and that such insurance policies are in full force and effect.
6.6 Compliance with Certain Documents and Agreements. The Company and
each Guarantor (and any of their respective Subsidiaries or Affiliates) shall
have each performed and complied in all material respects with all agreements
and conditions contained in this Agreement, other Loan Documents, or any
agreement or other document executed thereunder and required to be performed or
complied with by each of them (as of the applicable date) and none of such
parties shall be in material default in the performance or compliance with any
of the terms or provisions hereof or thereof.
6.7 Opinion of Counsel. Company and each Guarantor shall furnish Agent
prior to the initial Advance under this Agreement, and with signed copies for
each Bank, opinions of counsel to the Company and such Guarantor, dated the date
hereof, and covering such matters as reasonably required by and otherwise
reasonably satisfactory in form and substance to the Agent and each of the
Banks.
44
52
EXHIBIT 10.1
6.8 Company's Certificate. The Agent shall have received, prior to the
initial Advance under this Agreement (with a signed counterpart for each Bank),
a certificate of a Responsible Officer of Company dated the date of the making
of Advances hereunder, stating that to the best of his or her knowledge after
due inquiry, (a) the conditions of paragraphs 6.1, 6.3, 6.5, 6.6, 6.11 and 6.13
hereof have been fully satisfied; (b) the representations and warranties made by
Company, each Guarantor or any other party to any of the Loan Documents
(excluding the Agent and Banks) in this Agreement or any of the other Loan
Documents, and the representations and warranties of any of the foregoing which
are contained in any certificate, document or financial or other statement
furnished at any time hereunder or thereunder or in connection herewith or
therewith shall have been true and correct in all material respects when made
and shall be true and correct in all material respects on and as of the
Effective Date; and (c) no Default or Event of Default shall have occurred and
be continuing, and there shall have been no material adverse change in the
financial condition, properties, business, results or operations of the Company
and its Subsidiaries taken as a whole from March 31, 1998 to the date of the
making of the first borrowing hereunder.
6.9 Payment of Fees. Company shall have paid to the Agent all interest,
fees, costs and expenses accrued to the Effective Date for which reimbursement
is then owing under the Prior Credit Agreement, and all fees, costs and expenses
required to be paid to Agent upon execution of this Agreement.
6.10 Pro Forma Balance Sheet. The Company shall have delivered to the
Agent a pro forma consolidated balance sheet of the Company and its Subsidiaries
(the "Closing Pro Forma Balance Sheet"), certified by the chief financial
officer of the Company that it fairly presents the pro forma adjustments
reflecting the consummation of the transactions (including the National Dynamics
Acquisition) contemplated by this Agreement, including all material fees and
expenses in connection therewith, subject to normal year end adjustments.
6.11 Existing Credit Facilities. All existing Debt (including the Term
Loan as that term was defined in the Prior Agreement), other than Debt expressly
permitted hereunder and Loans hereunder to be made or continued on the Effective
Date, together with all interest, all prepayment premiums and other amounts due
and payable with respect thereto, shall have been paid in full and the related
commitments terminated.
6.12 Lessors' Acknowledgments. Agent has received lessors'
acknowledgments, in form and substance acceptable to the Agent and the Banks, in
connection with the property in Illinois and Wisconsin leased by Company.
6.13 National Dynamics Acquisition Documents. The Agent shall have
received executed copies of the National Dynamics Acquisition Documents,
certified by a Responsible Officer of the Company. The National Dynamics
Acquisition Documents shall be in form and substance satisfactory to the Agent
and the Majority Banks and each of the National Dynamics Acquisition Documents
shall have been duly authorized, executed and delivered by each of the parties
thereto and shall be in full force and effect. No material term or provision of
the National Dynamic Acquisition Documents shall have been modified, and no
material condition to consummation of
45
53
EXHIBIT 10.1
the National Dynamics Acquisition shall have been waived, in either case in a
manner detrimental to the Company, by any of the parties thereto. The Company
shall have in all material respects done and performed such acts and observed
such covenants which it is required to do or perform under the National Dynamics
Acquisition Documents and in order to consummate the National Dynamics
Acquisition on or prior to the Effective Date. The Company shall have delivered,
or caused to be delivered to the Agent, National Dynamics' audited financial
statements as of the end of the most recent fiscal year end.
6.14 Subordinated Debt. On or before the Effective Date, the Agent
shall have received evidence that the Subordinated Notes shall have been issued
in an aggregate amount not less than $125,000,000 and the Whitney Subordinated
Debt (as such term is defined in the Prior Agreement) has been repaid in full.
6.15 Perfection of Security Interests. The Agent shall have received
(i) the results of searches of the Uniform Commercial Code (or equivalent)
filings made with respect to the Company and its Subsidiaries (and National
Dynamics and any of its subsidiaries which shall be transferring assets to
Company (herein, the "National Dynamics Parties") under the National Dynamics
Acquisition Documents) in those jurisdictions in which property to be acquired
pursuant to the National Dynamics Acquisition which will become Collateral is
located and in the jurisdictions in which the Company, any Subsidiary or any of
the National Dynamics Parties maintains its chief executive office (any filings
which shall have been disclosed pursuant to such search shall be either
permitted under Section 9.2 hereof or shall be released) and (ii) any documents
(including, without limitation, financing statements, amendments to financing
statements and assignments of financing statements, and stock powers) required
to be filed in connection with the Security Agreement or the Pledge Agreements
to create, in favor of the Agent (for and on behalf of the Banks), a perfected
security interest in the Collateral thereunder shall have been delivered to the
Agent in a proper form for filing in each office in each jurisdiction listed in
Schedule 6.3 and with the United States Patent and Trademark Office, or other
office, as the case may be.
6.16 Other Documents and Instruments. The Agent shall have received,
with a photocopy for each Bank, such other instruments and documents as each of
the Banks may reasonably request in connection with the making of Advances or
issuance of Letters of Credit hereunder, and all such instruments and documents
shall be satisfactory in form and substance to Agent and each Bank.
6.17 Continuing Conditions. The obligations of the Banks to make
Advances (including the initial Advance) under this Agreement and the obligation
of the Issuing Bank to issue any Letters of Credit shall be subject to the
continuing conditions that:
(a) All conditions of Sections 6.1 through 6.16 shall have been and
remain satisfied as of the date of the Advance or the request for the Letter of
Credit;
(b) No Default or Event of Default shall exist as of the date of the
Advance or the request for the Letter of Credit; and
46
54
EXHIBIT 10.1
(c) Each of the representations and warranties contained in this
Agreement and in each of the other Loan Documents shall be true and correct in
all material respects as of the date of the Advance or Letter of Credit.
7. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and warranties
shall be deemed to be continuing representations and warranties until the
Revolving Credit Maturity Date and thereafter until the expiration of all
Letters of Credit and the final payment in full of the Indebtedness and the
performance by Company of all other obligations under this Agreement:
7.1 Corporate Authority. Company is a corporation duly organized and
existing in good standing under the laws of the State of Delaware; each
Subsidiary is a corporation or other business entity duly organized and existing
in good standing under the laws of the jurisdiction of its incorporation; the
Parent is a limited liability company duly organized and existing under the laws
of Wisconsin; and each of the Company, its Subsidiaries and the Parent is duly
qualified and authorized to do business as a foreign corporation in each
jurisdiction where the character of its assets or the nature of its activities
makes such qualification necessary and where failure to be so qualified would
have a material adverse effect on their respective businesses.
7.2 Due Authorization - Company. Execution, delivery and performance of
this Agreement, the Reaffirmation of Certain Loan Documents, the other Loan
Documents and any other documents and instruments required under or in
connection with this Agreement or the other Loan Documents (or to be so executed
and delivered), and the issuance of the Notes by Company are within its
corporate powers, have been duly authorized, are not in contravention of law or
the terms of the Company's organizational documents and, except as have been
previously obtained or as referred to in Section 7.13, below, do not require the
consent or approval, material to the transactions contemplated by this Agreement
and the other Loan Documents, of any governmental body, agency or authority.
7.3 Due Authorization - Guarantors. Execution, delivery and performance
of the Reaffirmation of Certain Loan Documents, any other Loan Documents and all
other documents and instruments required of Guarantors under or in connection
with this Agreement and the other Loan Documents (or to be so executed and
delivered), and to which each Guarantor is a party, are within the corporate
powers or limited liability company of each such Guarantor, have been duly
authorized, are not in contravention of law or the terms of such Guarantor's
organizational documents, and, except as have been previously obtained (or as
referred to in Section 7.13 below), do not require the consent or approval,
material to the transactions contemplated by this Agreement and the other Loan
Documents, of any governmental body, agency or authority not previously
obtained.
7.4 Liens. There are no security interests in, liens, mortgages, or
other encumbrances on and no financing statements on file with respect to any of
the property owned, pledged, mortgaged
47
55
EXHIBIT 10.1
or otherwise encumbered (or to be encumbered) by Company, any of the Guarantors
or any of the Subsidiaries except for Liens permitted pursuant to Section 9.2.
7.5 Taxes. Company, each of the Guarantors, and each of the
Subsidiaries has filed on or before their respective due dates or within the
applicable grace periods, all federal, state and foreign tax returns which are
required to be filed or has obtained extensions for filing such tax returns and
is not delinquent in filing such returns in accordance with such extensions and
has paid all taxes which have become due pursuant to those returns or pursuant
to any assessments received by any such party, as the case may be, to the extent
such taxes have become due, except to the extent such tax payments are being
actively contested in good faith by appropriate proceedings and with respect to
which adequate provision has been made on the books of Company, such Guarantor
or such Subsidiary as may be required by GAAP.
7.6 No Defaults. There exists no material default under the provisions
of any instrument evidencing any indebtedness for borrowed money of the Company,
any Guarantor or any Subsidiary which is permitted hereunder or of any agreement
relating thereto.
7.7 Enforceability of Agreement and Loan Documents -- Company. This
Agreement, each of the other Loan Documents to which Company is a party, and all
other certificates, agreements and documents executed and delivered by Company
under or in connection herewith or therewith have each been duly executed and
delivered by its duly authorized officers and constitute the valid and binding
obligations of Company, enforceable in accordance with their respective terms,
except as enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or similar laws
affecting the enforcement of creditor's rights, generally and by general
principles of equity (regardless of whether enforcement is considered in a
proceeding in law or equity).
7.8 Enforceability of Loan Documents -- Guarantors. The Loan Documents
to which each of the Guarantors is a party, and all certificates, documents and
agreements executed in connection therewith by the Guarantors have each been
duly executed and delivered by the duly authorized officers or members or
managers, as the case may be, of the Guarantors and constitute the valid and
binding obligations of such Guarantors, enforceable in accordance with their
respective terms, except as enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditor's rights, generally and by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in law or equity).
7.9 Compliance with Laws. Except as disclosed on Schedule 7.9, each of
the Company, each of the Guarantors and each of the Subsidiaries has complied
with all applicable federal, state and local laws, ordinances, codes, rules,
regulations and guidelines (including consent decrees and administrative orders)
except to the extent that failure to comply therewith would not materially
interfere with the conduct of the business of Company, each of the Guarantors
and each of the Subsidiaries taken as a whole, or would not have a Material
Adverse Effect; except for such matters as are not likely to have a Material
Adverse Effect, and except as set forth in Schedule 7.9 hereof,
48
56
EXHIBIT 10.1
and without limiting the generality of Section 7.12, there have been no
past, and there is no pending or threatened, litigation, action, proceeding or
controversy affecting the Company, any of the Guarantors or any of the
Subsidiaries, and no pending or threatened complaint, notice or inquiry to the
Company, any of the Guarantors or any of the Subsidiaries, regarding potential
liability of the Company, any of the Guarantors or any of the Subsidiaries, or
any officer, director, agent or employee of the Company, any of the Guarantors
or any of the Subsidiaries; and, to the knowledge of the Company, no facts or
situation exists that could form the basis for any such litigation, action,
proceeding, controversy, complaint, notice or inquiry.
7.10 Non-contravention -- Company. The execution, delivery and
performance of this Agreement and the other Loan Documents and any other
documents and instruments required under or in connection with this Agreement by
Company are not in contravention of the terms of any indenture, agreement or
undertaking to which Company or any of its Subsidiaries is a party or by which
its or their properties are bound or affected where such violation would
reasonably be expected to have a Material Adverse Effect.
7.11 Non-contravention -- Guarantors. The execution, delivery and
performance of those Loan Documents signed by the Guarantors, and any other
documents and instruments required under or in connection with this Agreement or
any other Loan Document by the Guarantors are not in contravention of the terms
of any indenture, agreement or undertaking to which any Guarantor or Company is
a party or by which it or its properties are bound or affected where such
violation would reasonably be expected to have a Material Adverse Effect.
7.12 No Litigation. Except for De Minimis Matters or as set forth on
Schedule 7.12 hereof, there is no suit, action, proceeding, including, without
limitation, any bankruptcy proceeding, or governmental investigation pending
against or to the knowledge of Company, affecting Company, any Guarantor or any
Subsidiary (other than any suit, action or proceeding in which Company, such
Guarantor or such Subsidiary is the plaintiff and in which no counterclaim or
cross-claim against Company, such Guarantor or such Subsidiary has been filed),
nor has Company, any Guarantor or any Subsidiary or any of its or their
officers, members, managers, or directors, as the case may be, been subject to
any suit, action, proceeding or governmental investigation as a result of which
any such officer, member, manager or director is or may be entitled to
indemnification by Company or a Guarantor or a Subsidiary, as applicable, which
suits, if resolved adversely to Company, such Guarantor or such Subsidiary, are
reasonably likely to have a Material Adverse Effect. Except as set forth on
Schedule 7.12, there is not outstanding against Company or any Subsidiary any
judgment, decree, injunction, rule, or order of any court, government,
department, commission, agency, instrumentality or arbitrator nor is Company,
any Guarantor or any Subsidiary in violation of any applicable law, regulation,
ordinance, order, injunction, decree or requirement of any governmental body or
court where such violation would reasonably be expected to have a Material
Adverse Effect.
7.13 Consents, Approvals and Filings, Etc. Except as have been
previously obtained, no authorization, consent, approval, license, qualification
or formal exemption from, nor any filing, declaration or registration with, any
court, governmental agency or regulatory authority or any
49
57
EXHIBIT 10.1
securities exchange or any other person or party (whether or not governmental)
is required in connection with the execution, delivery and performance: (i) by
Company of this Agreement, the Agreement and Plan of Reorganization, any of the
other Loan Documents to which it is a party, or any other documents or
instruments to be executed and or delivered by Company in connection therewith
or herewith; (ii) by any Guarantor, of any of the other Loan Documents to which
such Subsidiary is a party, or (iii) by Company or any of the Guarantors, of the
liens, pledges, mortgages, security interests or other encumbrances granted,
conveyed or otherwise established (or to be granted, conveyed or otherwise
established) by or under this Agreement or the other Loan Documents, except for
such filings to be made concurrently herewith as are required by the Collateral
Documents to perfect liens in favor of the Agent. All such authorizations,
consents, approvals, licenses, qualifications, exemptions, filings, declarations
and registrations which have previously been obtained or made, as the case may
be, are in full force and effect and are not the subject of any attack, or to
the knowledge of Company threatened attack (in any material respect) by appeal
or direct proceeding or otherwise.
7.14 Agreements Affecting Financial Condition. Neither the Company, nor
any Guarantor nor any Subsidiary is party to any agreement or instrument or
subject to any charter or other corporate restriction which has a Material
Adverse Effect.
7.15 No Investment Company or Margin Stock. Neither the Company, nor
any Guarantor nor any Subsidiary is an "investment company" within the meaning
of the Investment Company Act of 1940, as amended. Neither the Company, nor any
Guarantor nor any Subsidiary is engaged principally, or as one of its important
activities, directly or indirectly, in the business of extending credit for the
purpose of purchasing or carrying margin stock. None of the proceeds of any of
the Advances will be used by the Company nor any Subsidiary to purchase or carry
margin stock or will be made available by the Company or any of its Subsidiaries
in any manner to any other Person to enable or assist such Person in purchasing
or carrying margin stock. Terms for which meanings are provided in Regulation U
of the Board of Governors of the Federal Reserve System or any regulations
substituted therefor, as from time to time in effect, are used in this paragraph
with such meanings.
7.16 ERISA. Neither Company, nor any Guarantor nor any Subsidiary
maintains or contributes to any Pension Plan subject to Title IV of ERISA,
except as set forth on Schedule 7.16 hereto; and there is no accumulated funding
deficiency within the meaning of ERISA, or any existing liability with respect
to any of the Pension Plans owed to the Pension Benefit Guaranty Corporation or
any successor thereto, and no "reportable event" or "prohibited transaction", as
defined in ERISA, has occurred with respect to any Pension Plan, and all such
Pension Plans are in material compliance with the requirements of the Internal
Revenue Code and ERISA.
7.17 Conditions Affecting Business or Properties. Neither the
respective businesses nor the properties of Company, nor any Guarantor nor any
Subsidiary is affected by any fire, explosion, accident, strike, lockout or
other dispute, drought, storm, hail, earthquake, embargo, Act of God or other
casualty (whether or not covered by insurance).
50
58
EXHIBIT 10.1
7.18 Environmental and Safety Matters. Except as set forth in Schedules
7.18 and 7.12 and except for such matters as are not likely to have a Material
Adverse Effect:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Company or any of its Subsidiaries,
have been, and continue to be, owned or leased by the Company and the
Subsidiaries in material compliance with all Hazardous Material Laws;
(b) to the best knowledge of the Company, there have been no
past, and there are no pending or threatened
(i) claims, complaints, notices or requests
for information received by the Company or any of its
Subsidiaries with respect to any alleged violation of any
Hazardous Material Law, or
(ii) complaints, notices or inquiries to the
Company or any of its Subsidiaries regarding potential
liability under any Hazardous Material Law; and
(c) no conditions exist at, on or under any property now or
previously owned or leased by the Company or any of its Subsidiaries
which, with the passage of time, or the giving of notice or both, would
give rise to liability under any Hazardous Material Law.
7.19 Subsidiaries. As of the Effective Date, and except as disclosed on
Schedule 7.19 hereto, the Company has no Domestic Subsidiaries, Foreign
Subsidiaries or Significant Subsidiaries.
7.20 Accuracy of Information. (a) Each of the Company's financial
statements previously furnished to Agent and the Banks prior to the date of this
Agreement, has been prepared in accordance with GAAP and is complete and correct
in all material respects and fairly presents (subject to year-end adjustments in
the case of interim statements) the financial condition of Company and the
results of its operations for the periods covered thereby.
(b) Since March 31, 1998 through the Effective Date there has
been no material adverse change in the financial condition of Company or its
Subsidiaries taken as a whole; to the best knowledge of Company, neither Company
nor any of its Subsidiaries has any contingent obligations (including any
liability for taxes) not disclosed by or reserved against in the March 31, 1998
balance sheets, as applicable, except as set forth on Schedule 7.20 hereof, and
at the present time there are no unrealized or anticipated losses from any
present commitment of Company or any of its Subsidiaries which in the aggregate
is likely to have a Material Adverse Effect.
7.21 Financial Statements - Company. The Company has heretofore
delivered to the Banks consolidated financial statements of the Company audited
by KPMG Peat Marwick, including a balance sheet and statements of income, cash
flow and stockholders' equity of the Company and its Subsidiaries, audited by
KPMG Peat Marwick for the fiscal year ending December 31, 1996, audited by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP for the fiscal year ending December 31, 1997 and on an
unaudited basis
51
59
EXHIBIT 10.1
for its fiscal year ending March 31, 1998. Such financial statements were
prepared in accordance with GAAP consistently applied and fairly present the
financial position and results of operations of the Company and its Subsidiaries
for the periods covered thereby.
7.22 Solvency. As of the Effective Date of the Prior Agreement, after
giving effect to the Acquisition and the other transactions contemplated by the
Prior Agreement, the Company and each of its Subsidiaries was solvent, was able
to pay its indebtedness as it matures and had capital sufficient to carry on its
business and all business in which it was about to engage. After giving effect
to the consummation of the transactions contemplated by this Agreement, the
Company and each of its Subsidiaries will each be solvent, able to pay its
indebtedness as it matures and will have capital sufficient to carry on its
business and all business in which it is about to engage. This Agreement is
being executed and delivered by the Company to Agent and the Banks in good faith
and in exchange for fair, equivalent consideration. Neither of the Company nor
any of its Subsidiaries is insolvent, nor will either the Company or any
Subsidiary be rendered insolvent by its execution and delivery to Agent and the
Banks of this Agreement or by the consummation of the transactions contemplated
by this Agreement, and the capital and monies remaining in the Company and its
Subsidiaries are not now and will not become so unreasonably small as to
preclude the Company or its Subsidiaries from carrying on their businesses.
Neither the Company nor any Subsidiary intends to nor does management of the
Company or any Subsidiary believe it will incur debts beyond its ability to pay
as they mature. Neither the Company nor any Subsidiary contemplates filing a
petition in bankruptcy or for an arrangement or reorganization under the
Bankruptcy Code, nor does the Company or any Subsidiary have any knowledge of
any threatened bankruptcy or insolvency proceedings against Company or any
Subsidiary.
7.23 Year 2000 Requirement. The Company and its Subsidiaries have
reviewed the areas in their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis the risk that computer applications used by the Company and its
Subsidiaries may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31, 1999.
Any reprogramming required to permit the proper functioning, in and following
the year 2000, of (i) the Company's and its Subsidiaries' computer systems and
(ii) equipment containing embedded microchips (including systems and equipment
supplied by others or with which the Company's or any Subsidiary's systems
interface) and the testing of all such systems and equipment, as so
reprogrammed, will be completed by July 31, 1999. The cost to the Company and
its Subsidiaries of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Company and its Subsidiaries
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or a Material Adverse Effect.
Except for such of the reprogramming referred to in the preceding sentence as
may be necessary, the computer and management information systems of the Company
and its Subsidiaries are and, with ordinary course upgrading and maintenance,
will continue for the term of this Agreement to be, sufficient to permit the
Company and its Subsidiaries to conduct their business without Material Adverse
Effect.
52
60
EXHIBIT 10.1
8. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, and, as applicable, it will
cause each of its Subsidiaries, until the Revolving Credit Maturity Date and
thereafter until expiration of all Letters of Credit and final payment in full
of the Indebtedness and the performance by the Company of all
other obligations under this Agreement and the other Loan Documents:
8.1 Financial Statements. Furnish to the Agent with sufficient copies
for each Bank:
(a) as soon as available, but in any event within 105 days
after the end of each fiscal year of the Company (i) a copy of the
audited Consolidated financial statements of the Company as at the end
of such year and the related audited statements of income, statement of
stockholders' equity and cash flows for such year setting forth in
comparative form the figures for the previous year, certified as being
fairly stated in all material respects by a nationally recognized
certified public accountant satisfactory to the Agent and the Banks and
(ii) a copy of the Company prepared Consolidating financial statements
of the Company for such year setting forth in comparative form the
figures for the same period for the previous calendar year and
certified by a Responsible Officer as being fairly stated in all
material respects;
(b) as soon as available, but in any event not later than 45
days after the end of each fiscal quarter, including the last fiscal
quarter of the fiscal year, the unaudited Consolidated and
Consolidating financial statements of the Company as at the end of such
fiscal quarter and the related unaudited statements of income,
statement of stockholders' equity and cash flows of the Company for the
portion of the fiscal year through the end of such fiscal quarter,
setting forth in each case in comparative form the figures for the
previous year, and certified by a Responsible Officer as being fairly
stated in all material respects; and
(c) as soon as available, but in any event not later than 30
days after the end of each month, including the last month of the
fiscal year, except the last month of each fiscal quarter (including
the last month of the fiscal year) which shall be delivered not later
than 45 days after the end of each month, the unaudited Consolidated
financial statements of the Company as at the end of such month and the
related unaudited statements of income and cash flows of the Company
for the portion of the fiscal year through the end of such month,
setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly
stated in all material respects;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
throughout the periods reflected therein and with prior periods (except as
approved by such officer and disclosed therein), provided however that the
financial statements delivered pursuant to clauses (b) and (c) hereof will not
be required to include footnotes and will be subject to year-end adjustments, in
accordance with GAAP.
53
61
EXHIBIT 10.1
8.2 Certificates; Other Information. Furnish to the Agent with
sufficient copies for each Bank:
(a) Together with the financial statements required under
Section 8.1(b), a Covenant Compliance Certificate;
(b) Together with the financial statements delivered pursuant
to Section 8.1(a), annual financial projections for the Company in form
reasonably acceptable to the Agent and the Banks;
(c) Within 30 days after and as of the end of each March and
September of each year, a litigation status report in the form
satisfactory to the Agent and the Banks;
(d) On or before the required dates of delivery thereunder,
such other financial statements, projections, reports, supplements,
filings, notices, releases, and other information or materials required
to be delivered by Company to the holders of the Subordinated Debt, as
and to the extent requested in writing from time to time by Agent or
the Majority Banks; and
(e) promptly and in form to be reasonably satisfactory to
Majority Banks, such additional financial and/or other information, or
other reports as any Bank may from time to time reasonably request.
8.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all of its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Company.
8.4 Conduct of Business and Maintenance of Existence.
(a) Continue to engage solely in the business as now conducted
by it or in other lines of business compatible with, or complementary
thereto, and preserve, renew and keep in full force and effect its
existence;
(b) take all reasonable action to maintain all material
rights, privileges and franchises necessary or desirable in the normal
conduct of its business except as otherwise permitted pursuant to
Section 9.4; and
(c) comply with all Contractual Obligations and Requirements
of Law, except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
54
62
EXHIBIT 10.1
8.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and maintain insurance coverage
on its physical assets and against other business risks in such amounts and of
such types as are customarily carried by companies similar in size and nature
(including without limitation casualty and public liability and property damage
insurance), and in the event of acquisition of additional property, real or
personal, or of incurrence of additional risks of any nature, increase such
insurance coverage in such manner and to such extent as prudent business
judgment and present practice or any applicable Requirements of Law would
dictate; and in the case of all policies covering any Collateral, all such
insurance policies shall provide that the loss payable thereunder shall be
payable to Company, and to the Agent for the benefit of the Banks (Agent as
mortgagee, or, in the case of personal property interests, lender loss payee) as
their respective interests may appear, all said policies, copies thereof or
certificates evidencing the same, including all endorsements thereto, to be
deposited with Agent.
8.6 Inspection of Property; Books and Records, Discussions.
Permit Agent and each Bank, through their authorized attorneys,
accountants and representatives (a) to examine Company's and each Subsidiary's
books, accounts, records, ledgers and assets and properties of every kind and
description wherever located at all reasonable times during normal business
hours, upon oral or written request of Agent or such Bank; (b) at any time and
from time to time, at the request of the Majority Banks, to conduct full or
partial collateral audits of the Company and its Subsidiaries to be completed by
an appraiser as may be selected by Agent and the Majority Banks, with all
reasonable costs and expenses of such audits to be reimbursed by Company
(provided that Company shall not be required to reimburse for the cost of more
than one full audit per year, except to the extent of any audits conducted after
the occurrence and during the continuance of any Default or Event of Default);
and (c) permit Agent and each Bank or their authorized representatives, at
reasonable times and intervals, to visit all of their respective offices,
discuss their respective financial matters with their respective officers and
independent certified public accountants, and, by this provision, Company
authorizes such accountants to discuss the finances and affairs of Company and
its Subsidiaries (provided that Company is given an opportunity to participate
in such discussions) and examine any of its or their books and other corporate
records. Notwithstanding the foregoing, all information furnished to the Agent
or the Banks hereunder shall be subject to the undertaking of the Banks set
forth in Section 14.12 hereof.
8.7 Notices. Promptly give notice to the Agent of:
(a) the occurrence of any Default or Event of Default of which
the Company or any Subsidiaries has knowledge;
(b) any (i) default or event of default under any Contractual
Obligation of the Company or any Subsidiary or (ii) litigation,
investigation or proceeding which may exist at any time between the
Company or any Subsidiary and any Governmental Authority, which in
either case, if not cured or if adversely determined, as the case may
be, would have a Material Adverse Effect;
55
63
EXHIBIT 10.1
(c) the following events, as soon as possible and in any event
within 30 days after the Company knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any "reportable event" as
defined in ERISA with respect to any Pension Plan, or any withdrawal
from or the termination, reorganization or insolvency of any
Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the Pension Benefit Guaranty Corporation or the
Company or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from or the terminating, reorganization
or insolvency of any Pension Plan;
(d) a material adverse change in the business, operations,
property, or financial condition of the Company or any of its
Subsidiaries taken as a whole;
(e) promptly after becoming aware of the taking by the
Internal Revenue Service or any foreign taxing jurisdiction of a
written tax position which could reasonably be expected to have a
Material Adverse Effect upon the Company (or any such tax position
taken by the Company) setting forth the details of such position and
the financial impact thereof; and
(f) not less than 30 days prior to the proposed effective date
thereof, copies of any proposed amendments, restatements or other
modification to the Initial Acquisition Documents, or the Parent
Operating Agreement.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company proposes to take with respect thereto.
8.8 Hazardous Material Laws.
(a) Use and operate all of its facilities and properties in
material compliance with all material Hazardous Material Laws, keep all
necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain
in material compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Hazardous Material Laws;
(b) Promptly notify Agent and provide copies upon receipt of
all written claims, complaints, notices or inquiries received by the
Company or any of its Subsidiaries of a material nature relating to its
facilities and properties or compliance with Hazardous Material Laws,
and shall promptly cure and have dismissed with prejudice to the
satisfaction of the Majority Banks any actions and proceedings relating
to compliance with Hazardous Material Laws to which the Company or any
of its Subsidiaries is named as a party;
(c) Provide such information and certifications which any Bank
may reasonably request from time to time to evidence compliance with
this Section 8.8; and
56
64
EXHIBIT 10.1
(d) perform (or cause to be performed) and continue (or cause
to be continued) to completion, on or before the applicable compliance
date(s) set forth therein, all such actions as are described in
Schedules 8.8A and 8.8B hereof; provided however that Company
represents and warrants that those actions required to have been
completed by terms of Schedule 8.8A prior to the Effective Date have
been completed as of the Effective Date.
8.9 Maintain Base Tangible Net Worth. Maintain an Adjusted Consolidated
Tangible Net Worth at the end of each fiscal quarter of not less than the Base
Tangible Net Worth.
8.10 Fixed Charge Coverage Ratio. Maintain, as of the end of each
fiscal quarter, for the four fiscal quarters then ended, a Fixed Charge Coverage
Ratio of not less than 1.25 to 1.0
8.11 Senior Funded Debt to Consolidated EBITDA Ratio. Maintain, as of
the end of each fiscal quarter, for the four fiscal quarters then ended, a ratio
of Senior Funded Debt to Consolidated EBITDA of not more than 3.5 to 1.0.
8.12 [Reserved].
8.13 [Reserved].
8.14 Taxes. Pay and discharge all taxes and other governmental charges,
and all material contractual obligations calling for the payment of money,
before the same shall become overdue, unless and to the extent only that such
payment is being contested in good faith by appropriate proceedings and is
reserved for, as required by GAAP on its balance sheet, or where the failure to
pay any such matter could not have a Material Adverse Effect.
8.15 Governmental and Other Approvals. Apply for, obtain and/or
maintain in effect, as applicable, all authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any court, governmental agency, regulatory authority, securities
exchange or otherwise) which are necessary in connection with the execution,
delivery and performance: (i) by Company, of this Agreement, the other Loan
Documents, or any other documents or instruments to be executed and/or delivered
by Company in connection therewith or herewith; and (ii) by each of the
Subsidiaries, of the Loan Documents to which it is a party.
8.16 Compliance with ERISA. Comply in all material respects with all
requirements imposed by ERISA as presently in effect or hereafter promulgated or
the Internal Revenue Code, including, but not limited to, the minimum funding
requirements of any Pension Plan.
8.17 ERISA Notices. Promptly notify Agent upon the occurrence of any of
the following events:
(a) the termination of any Pension Plan subject to Subtitle C
of Title IV of ERISA;
57
65
EXHIBIT 10.1
(b) the appointment of a trustee by a United States District
Court to administer any Pension Plan subject to Title IV of ERISA;
(c) the commencement by the Pension Benefit Guaranty
Corporation, or any successor thereto, of any proceeding to terminate
any Pension Plan subject to Title IV of ERISA;
(d) the failure of the Company or any Subsidiary to make any
payment in respect of any Pension Plan required under Section 412 of
the Internal Revenue Code;
(e) the withdrawal of the Company or any Subsidiary from any
multiemployer plan (as defined in Section 3(37) of ERISA; or
(f) the occurrence of a "reportable event" which is required
to be reported by the Company under Section 4043 of ERISA or a
"prohibited transaction" as defined in Section 406 of ERISA or Section
4975 of the Internal Revenue Code which is likely to have a Material
Adverse Effect.
8.18 Security. Take such actions as the Majority Banks may from time to
time reasonably request to establish and maintain first perfected security
interests in and Liens on all of its Collateral, subject only to Permitted Liens
and other liens permitted under Section 9.2 hereof.
8.19 Defense of Collateral. Defend the Collateral from any Liens other
than Liens permitted by Section 9.2.
8.20 Use of Proceeds. Use all Advances of the Revolving Credit for
working capital financing and for Permitted Acquisitions. Company shall not use
any portion of the proceeds of any such advances for the purpose of purchasing
or carrying any "margin stock" (as defined in Regulation G of the Board of
Governors of the Federal Reserve System) in any manner which violates the
provisions of Regulation G, T, U or X of said Board of Governors or for any
other purpose in violation of (x) any applicable statute or regulation or (y)
the terms and conditions of this Agreement.
8.21 Future Subsidiaries.
(a) With respect to each Person which becomes a Significant Subsidiary
subsequent to the Effective Date, (A) within thirty days of the date such
Significant Subsidiary is created or acquired, cause such new Subsidiary to
execute and deliver to the Agent (i) in the case of each Domestic Significant
Subsidiary, a Joinder Agreement whereby such Domestic Significant Subsidiary
becomes obligated as a Guarantor under the Guaranty, (ii) in the case of each
Domestic Subsidiary, a joinder agreement whereby each such Subsidiary becomes
obligated under the Security Agreement, in each case accompanied by such
supporting documentation, including without limitation corporate authority
items, certificates and opinions of counsel, as reasonably required by Agent and
the Majority Banks, (iii) in each case where the payee thereunder is the Company
or a
58
66
EXHIBIT 10.1
Domestic Subsidiary, the executed original Intercompany Note(s) which shall
be substantially in the form of Exhibit K hereto (to perfect the pledge of such
notes pursuant to the Security Agreement) and (B) in the case of each Domestic
Significant Subsidiary described in clause (A) above which owns or acquires any
parcel of real estate located in the United States with an individual value in
excess of $500,000 (i) within thirty days of the date such Domestic Significant
Subsidiary is created or acquired or within thirty days of the date such real
estate is acquired, as the case may be, deliver to the Agent a written
environmental audit or risk assessment acceptable to the Agent and the Banks
prepared at the Company's expense by an engineer or auditing firm experienced in
such matters reasonably acceptable to the Agent and the Banks with respect to
the subject real estate; and (ii) within thirty days following the request of
the Majority Banks, a Mortgage together with the real estate documentation
listed on Schedule 8.21 hereof; and
(b) With respect to the share capital (or other ownership interests) of
each Domestic or direct Foreign Significant Subsidiary which is created or
acquired subsequent to the date hereof, the Company shall execute, or cause to
be executed, and deliver to the Agent a stock pledge encumbering (i) 100% of the
share capital of each Domestic Significant Subsidiary and (ii) 65% of the share
capital of each direct Foreign Significant Subsidiary, in each case, together
with such supporting documentation, including without limitation corporate
authority items, certificates and opinions of counsel, as reasonably required by
the Agent and the Majority Banks.
8.22 Financial Covenant Amendments. In the event that, at any time
while this Agreement is in effect, the Company shall issue any indebtedness for
borrowed money otherwise permitted under this Agreement and such indebtedness
shall include, or be issued pursuant to a trust indenture or other agreement
which includes, financial or other covenants which are not substantially similar
to the financial or other covenants set forth in this Agreement, the Company
shall so advise the Agent in writing; provided that the covenants in the
Subordinated Debt Documents shall be deemed not to constitute "More Favorable
Terms" (as such term is defined herein) for the purposes of this Section 8.22.
Such notice shall be accompanied by a copy of the applicable agreement
containing such financial or other covenants. The Agent shall promptly furnish a
copy of such notice and the applicable agreement to each of the Banks. If the
Majority Banks determine in their sole discretion that some or all of the
financial or other covenants set forth in such agreement are more favorable to
the lender thereunder than the financial or other covenants (as applicable) set
forth in this Agreement ("More Favorable Terms") and that the Majority Banks
desire that this Agreement be amended to incorporate the More Favorable Terms,
then the Agent shall give written notice of such determination to the Company.
Thereupon, and in any event within thirty (30) days following the date of notice
by Agent to the Company, Company and the Banks shall enter into an amendment to
this Agreement incorporating, on terms and conditions acceptable to the Majority
Banks, the More Favorable Terms.
8.23 Further Assurances. Execute and deliver or cause to be executed
and delivered to Agent within a reasonable time following Agent's request, and
at the Company's expense, such other documents or instruments as Agent may
reasonably require to effectuate more fully the purposes of this Agreement or
the other Loan Documents.
59
67
EXHIBIT 10.1
9. NEGATIVE COVENANTS.
Company covenants and agrees that, until the Revolving Credit Maturity
Date and thereafter until expiration of all Letters of Credit and final payment
in full of the Indebtedness and the performance by Company and the Subsidiaries
of all other obligations under this Agreement and the other Loan Documents, it
will not, and will not permit any of the Subsidiaries, to:
9.1 Limitation on Debt. Create, incur, assume or suffer to exist any
Debt, except:
(a) Indebtedness in respect of the Notes, the Letters of
Credit and other obligations of the Company or any Subsidiary under
this Agreement and the other Loan Documents to which it is a party;
(b) any Debt set forth in Schedule 9.1(b) attached hereto and
any renewals or refinancing of such Debt in amounts not exceeding the
scheduled amounts (less any required amortization according to the
terms thereof), on substantially the same terms and otherwise in
compliance with this Agreement;
(c) Debt of the Company or a Subsidiary other than pursuant to
this Agreement and other than Debt set forth in Schedule 9.1(c)
attached hereto incurred to finance the acquisition of fixed or capital
assets(whether pursuant to a loan or a Capitalized Lease) in an
aggregate amount at any time outstanding not to exceed two and one-half
percent (2 1/2%) of Adjusted Consolidated Tangible Net Worth as of the
Applicable Evaluation Date, and any renewals or refinancing of such
Debt in amounts not exceeding the scheduled amounts (less any required
amortization according to the terms thereof), on substantially the same
terms and otherwise in compliance with this Agreement;
(d) Debt required to be repaid under Section 6.10 hereof and
covered by a cash escrow arrangement established thereunder, pending
the payment and discharge in full of such Debt and letters of credit
disclosed in Schedule 9.1(b) hereto and covered by a Letter of Credit
issued hereunder;
(e) Debt in respect of taxes, assessments or governmental
charges to the extent that payment thereof shall not at the time be
required to be made in accordance with Section 8.14;
(f) current unsecured trade, utility or nonextraordinary
accounts payable (including without limitation, short term Debt owed to
vendors), and payment or performance bonds, in each case arising in the
ordinary course of Company's or such Subsidiary's businesses;
(g) loans to officers and employees permitted under section
9.8(c) hereof;
(h) Permitted Subordinated Debt;
60
68
EXHIBIT 10.1
(i) Indebtedness under any Interest Rate Protection
Agreements;
(j) Intercompany Loans from the Company to 100% Subsidiaries,
but only to the extent permitted under the other applicable terms and
limitations of this Agreement, including but not limited to Section 9.8
hereof;
(k) Non-current liabilities for post-employment health care
and other insurance benefits;
(l) Intercompany Loans from Aqua-Chem International, Inc. to
the Company but only to the extent permitted under the applicable terms
and limitations of this Agreement, including but not limited to Section
9.8 hereof;
(m) Debt assumed pursuant to a Permitted Acquisition, provided
that such Debt was not entered into, extended or renewed in
contemplation of such acquisition (including Debt secured by Liens
permitted by 9.2(c)), provided that the aggregate amount of all such
Debt at any time outstanding (excluding trade payables and other
liabilities which do not constitute Debt for money borrowed incurred in
the ordinary course of business) shall not exceed five percent (5%) of
Adjusted Consolidated Tangible Net Worth as of the Applicable
Evaluation Date;
(n) Unsecured overdraft line of credit or similar credit
arrangement maintained by any Foreign Subsidiary in the ordinary course
of business with a bank or other financial institution in a foreign
country, in an amount not to exceed $500,000 for each such Subsidiary;
and
(o) additional unsecured Debt not exceeding $5,000,000 in
aggregate principal amount at any one time outstanding.
9.2 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Permitted Liens;
(b) Liens securing Debt permitted by Section 9.1(c) incurred
to finance the acquisition of fixed or capital assets, provided that
(i) such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at
any time encumber any property other than the property financed by such
Debt, (iii) the amount of Debt secured thereby is not increased and
(iv) the principal amount of Debt secured by any such Lien shall at no
time exceed 100% of the original purchase price of such property;
61
69
EXHIBIT 10.1
(c) any Lien securing indebtedness assumed pursuant to a
Permitted Acquisition, provided that such Lien is limited to the
property so acquired, and was not entered into, extended or renewed in
contemplation of such acquisition;
(d) Liens in favor of Agent, as security for the Indebtedness;
(e) attachments, judgments and other similar Liens, for sums
not exceeding, in the aggregate, $1,000,000 (excluding any portion
thereof which is covered by adequate insurance with a reputable carrier
and which insurer has accepted a tender of defense and indemnification
without reservation of rights) arising in connection with court
proceedings, provided that the execution or other enforcement of such
Liens is effectively stayed and claims secured thereby are being
actively contested in good faith and by appropriate proceedings);
(f) Liens securing Interest Rate Protection Agreements
permitted under Section 9.1(i); and
(g) other Liens, existing on the Effective Date, set forth on
Schedule 9.2.
9.3 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation (i) except pursuant to the Loan
Documents, (ii) Guarantee Obligations in connection with payment or performance
bonds permitted under Section 9.1(f) hereof and (iii) guaranties made in the
ordinary course of its business by the Company or any of its Subsidiaries of
obligations of any of the Company's Subsidiaries, which obligations are
otherwise permitted under this Agreement.
9.4 Acquisitions. Other than Permitted Acquisitions, purchase or
otherwise acquire or become obligated for the purchase of all or substantially
all or any material portion of the assets or business interests of any Person,
firm or corporation, or any shares of stock (or other ownership interests) of
any corporation, trusteeship or association, or any business or going concern,
or in any other manner effectuate or attempt to effectuate an expansion of
present business by acquisition.
9.5 Limitation on Fundamental Changes and Sale of Assets. Make any
material change in its capital structure or enter into any merger or
consolidation or convey, sell, lease, assign, transfer or otherwise dispose of
any of its property, business or assets (including, without limitation,
receivables and leasehold interests), whether now owned or hereafter acquired,
except:
(a) inventory leased or sold in the ordinary course of
business or obsolete or worn out property, property no longer useful in
the conduct of Company's or any Subsidiary's business or property from
closed offices, in each case disposed of in the ordinary course of
business;
(b) the restructuring of the Company as a limited liability
company so long as (i) the Company gives the Agent 45 days prior
written notice of such restructuring, (ii) the
62
70
EXHIBIT 10.1
surviving entity ("New Company") is a limited liability company
specially created for this restructuring, (iii) New Company assumes in
writing all of the obligations of the Company pursuant to this
Agreement on terms and conditions satisfactory to the Agent and the
Majority Banks and (iv) New Company delivers to the Agent such
authority documents, opinions of counsel and documents evidencing the
merger, together with financing statements, replacement notes and such
other documents as shall be required by the Agent and the Majority
Banks in connection therewith;
(c) so long as no Default or Event of Default has occurred and
is continuing, any Subsidiary may be merged or consolidated with or
into the Company (so long as Company shall be the continuing or
surviving corporation); any Domestic Subsidiary may be merged or
consolidated with or into any wholly owned Domestic Subsidiary (so long
as such wholly owned Domestic Subsidiary shall be the continuing or
surviving corporation); and any Foreign Subsidiary may be merged or
consolidated with or into any wholly owned Domestic Subsidiary or into
any wholly owned Foreign Subsidiary so long as such wholly owned
Domestic Subsidiary or such wholly owned Foreign Subsidiary shall be
the continuing or surviving corporation);
(d) merger of any Person into the Company or any Wholly-Owned
Subsidiary which otherwise satisfies the requirements for a "Permitted
Acquisition";
(e) (i) the sale, assignment, transfer, lease, conveyance or
other disposition of certain assets located in Lebanon, Pennsylvania,
Greenville, Mississippi, the research and development facility in
Milwaukee, Wisconsin; (ii) the Company's limited partnership interest
in the partnership which owns the office building that houses the
Company's Milwaukee offices; (iii) Asset Sales in which the sales price
is at least the fair market value of the assets sold (and at least 75%
thereof is payable in cash on the consummation of such sale) and the
aggregate value of the assets covered by such Asset Sales in any fiscal
year, determined on the basis of the net book value thereof, is less
than two and one-half percent (2 1/2%) of Adjusted Consolidated
Tangible Net Worth as of the Applicable Evaluation Date, and (iv) other
Asset Sales approved by the Banks; and
(f) the discounting of Accounts owing by Account Debtors
located outside the United States or incorporated in or primarily
conducting business in any jurisdiction outside the United States;
provided, however, that (i) each such discounting transaction shall be
at a discount rate no greater than the lesser of (x) the applicable
Eurocurrency-based Rate (such rate to be determined by calculating the
Eurocurrency-based Rate for an Interest Period equal to the number of
months before such Account is due) plus 3% and (y) an annualized
discount rate of 9%, without recourse and otherwise on normal and
customary terms and conditions for the discounting of foreign trade
receivables, as determined in the reasonable discretion of the Company,
and (ii) on the date of the consummation of each such discounting
transaction, both before and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing.
63
71
EXHIBIT 10.1
9.6 Restricted Payments. Declare or make, or permit any Subsidiary to,
declare or make any distributions, dividend, payment or other distribution of
assets, properties, cash, rights, obligations or securities (collectively,
"Distributions") on account of any membership interests or any shares of any
class of its capital stock, as applicable, or purchase, redeem or otherwise
acquire for value any membership interests or any shares of its capital stock,
as applicable, or any warrants, rights or options to acquire such shares or
membership interests, now or hereafter outstanding; except:
(a) Company's Subsidiaries may make Distributions to Company;
(b) in the event the Company converts to a limited liability
company pursuant to Section 9.5 hereof, Company may declare and make
Distributions which do not exceed the tax liability of the Company's
members attributable to income of the Company (assuming the highest
marginal federal tax rate applicable to any member), as and to the
extent such liability is incurred, so long as the Company is a limited
liability company and has elected, for purposes of the Internal Revenue
Code, to be treated as a partnership;
(c) so long as no Default or Event of Default has occurred and
is continuing or would occur after giving effect thereto, purchases of
stock of former officers or employees of the Company;
(d) any indirect Foreign Subsidiary may make Distributions to
its shareholders (including any third party shareholders); provided
however that, both before and after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing, and such
Distributions are declared and paid on substantially the same terms and
conditions and on a corresponding basis for all shareholders (except
that the dates of payment of such Distributions by such Foreign
Subsidiary may be adjusted for the respective accounting fiscal years
of its shareholders), and payment of all such Distributions to all
shareholders is made within a period of four months from the payment of
the first such Distribution to any shareholder; and
(e) so long as no Default or Event of Default has occurred and
is continuing, Company may redeem shares of its Series A Preferred
Stock and make distributions thereon as provided in the Restated
Articles.
9.7 Limitation on Capital Expenditures. Make or commit to make (by way
of the acquisition of securities of a Person or otherwise) any expenditure in
respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except for:
(a) Permitted Acquisitions permitted by Section 9.4, to the
extent assets are acquired which constitute Capital Expenditures; and
64
72
EXHIBIT 10.1
(b) expenditures in the ordinary course of business not
exceeding, in the aggregate for the Company during any fiscal year, an
amount equal to the CapEx Limit, determined on a non-cumulative basis
in accordance with GAAP; except that the unused amount of the CapEx
Limit in any fiscal year may be carried over and used in the next
succeeding fiscal year, provided that there shall be no carry over of
such unused amount in any subsequent year and provided further that for
purposes of calculating the amount which may be carried over, all
Capital Expenditures for a fiscal year shall be first applied to the
CapEx Limit for such year.
9.8 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities, of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) Permitted Investments;
(b) extensions of trade credit in the ordinary course of
business;
(c) loans and advances to officers and employees of the
Company or any Subsidiary in the ordinary course of business in an
aggregate amount, not to exceed $1,000,000 at any one time outstanding;
and
(d) Intercompany Loans, Advances or Investments to Company's
Domestic Significant Subsidiaries;
(e) Intercompany Loans, Advances, or Investments to Company's
Foreign Subsidiaries without regard to any repayment of such loans,
advances, or investments (other than the repayment or recovery of
capital or principal), in an aggregate amount at any time outstanding
not to exceed (absent the consent of the Majority Banks), 20% of the
Base Tangible Net Worth;
(f) loans, advances or investments (without regard to any
repayment of such loans, advances or investments, other than the
repayment of capital or principal) to any Joint Venture or Subsidiary
which does not constitute a 100% Subsidiary, including without
limitation (i) loans, advances or investments permitted under any other
provision of this Agreement and (ii) guaranties by the Company or any
Subsidiary (valued on the basis of the aggregate amount of such
indebtedness covered by a guaranty) of third-party indebtedness of any
such Joint Venture or non-100% Subsidiary, in an aggregate amount, for
all such loans, advances and investments under this subsection (f), at
any time not to exceed ten percent (10%) of Base Tangible Net Worth;
(g) purchases of Equity Interests permitted by Section 9.6 (b)
hereof;
(h) Intercompany Loans permitted by Section 9.1(j) or (l)
hereof; and
65
73
EXHIBIT 10.1
(i) Permitted Acquisitions permitted pursuant to Section 9.4
and promissory notes or other instruments received from third parties
in connection with Asset Sales permitted under Section 9.5(e)(iii)
hereof.
In valuing any Investments for the purpose of applying the limitations set forth
in this Section 9.8 (except as otherwise expressly provided herein), such
Investment shall be taken at the original cost thereof, without allowance for
any subsequent write-offs or appreciation or depreciation, but less any amount
repaid or recovered on account of capital or principal.
9.9 Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate of the Company or any
Subsidiary unless such transaction is in the ordinary course of the Company's or
such Subsidiary's business and is upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than it would obtain in a comparable
arms length transaction with a Person not a Subsidiary and is not otherwise
prohibited by this Agreement.
9.10 Sale and Leaseback. Except as permitted by Section 9.1(c), enter
into any arrangement with any Person providing for the leasing by the Company or
any Subsidiary of real or personal property which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Company or such
Subsidiary, as the case may be.
9.11 Limitation on Negative Pledge Clauses. Except for any agreements,
documents or instruments pursuant to which Liens not prohibited by the terms of
this Agreement are created, entered into, or allow to exist, enter into any
agreement, document or instrument which would restrict or prevent Company and
its Subsidiaries from granting Agent on behalf of Banks liens upon, security
interests in and pledges of their respective assets which are senior in priority
to all other Liens.
9.12 Prepayment of Debts. Prepay, purchase, redeem or defease any Debt
for money borrowed (including Permitted Subordinated Debt) or any capital leases
excluding, subject to the terms hereof, the Indebtedness except:
(a) the defeasance, redemption, repurchase or prepayment of
any Permitted Subordinated Debt (other than the Subordinated Notes)
with the cash proceeds of new Permitted Subordinated Debt;
(b) where the consideration therefore consists of, or is
derived solely from, the sale of common stock of the Company or its
Subsidiaries;
provided, however, that the prepayment, purchase, redemption or defeasance
described above shall not be permitted if either a Default or Event of Default
shall have occurred and be continuing at the date of declaration or payment
thereof or would result therefrom.
66
74
EXHIBIT 10.1
9.13 Subordinated Obligations and Subordinated Debt. (a) Other than as
permitted by Section 6(a) of the Subordination Agreement, amend or modify any
document evidencing any Subordinated Obligations (as such terms is defined in
the Subordination Agreement) Debt or make any payment with respect to the
Subordinated Obligations; and (b) amend or modify any document evidencing any
Subordinated Debt or make any payment with respect to the Subordinated Debt
except for regularly scheduled payments of principal and interest, subject to
the blockage provisions contained in the Subordinated Debt Documents.
9.14 Modification of Certain Agreements. Make, permit or consent to any
amendment or other modification to the constitutional documents of Company, the
Parent Operating Agreement or the Initial Acquisition Documents or the National
Dynamics Acquisition Documents, except to the extent that any such amendment (i)
does not violate the terms and conditions of this Agreement or any of the other
Loan Documents, (ii) does not adversely affect the interest of the Banks as
creditor under this Agreement, the other Loan Documents or any other document or
instrument in any respect and (iii) could not reasonably be expected to have a
material adverse effect upon Company and its Subsidiaries, taken as a whole or
Parent, as the case may be.
9.15 Management Fees. Pay or otherwise advance, directly or indirectly,
to any Affiliate in respect of any fiscal year, any management, consulting or
other fee, except for an annual management fee to Equity Partners in the amount
of $75,000 (the "Management Fee") payable (i) $50,000 in cash per year and (ii)
$25,000 per year to accrue to the account of Equity Partners until the
irrevocable payment and discharge in full of all Indebtedness. On or before the
date of payment of the portion of the Management Fee under clause (i) above, the
Company shall have delivered the annual financial statements required under
Section 8.1(a) for the applicable fiscal year. Notwithstanding the foregoing,
however, no such Management Fee shall be paid or otherwise advanced so long as
any Default or Event of Default has occurred and is continuing. In the event any
installment of the Management Fee in clause (i) for any period otherwise payable
in compliance with this Section is not paid because of the occurrence of a
Default or Event of Default, and such Default or Event of Default is
subsequently cured (or waived by the requisite Banks) in compliance with this
Agreement, Company may pay such installment upon not less than thirty (30) days
prior written notice to Agent of its intent to make such payment, provided that
no new Default or Event of Default has occurred and is continuing.
10. DEFAULTS
10.1 Events of Default. The occurrence of any of the following events
shall constitute an Event of Default hereunder:
(a) non-payment when due of (i) the principal or interest
under any of the Notes issued hereunder in accordance with the terms
thereof, (ii) any Reimbursement Obligation, or (iii) any Fees, and in
the case of interest payments and Fees, continuance thereof for three
(3) Business Days;
(b) non-payment of any money by Company under this Agreement
or by Company or any Subsidiary under any of the Loan Documents to
which it is a party, other
67
75
EXHIBIT 10.1
than as set forth in subsection (a), above within five Business Days
after notice from Agent that the same is due and payable;
(c) default in the observance or performance of any of the
conditions, covenants or agreements of Company set forth in Sections
2.7, 3.6, 8.1, 8.2, 8.4(a), 8.6, 8.7, 8.9 through 8.13, 8.19, 8.21,
8.22, or 9 (in its entirety);
(d) default in the observance or performance of any of the
other conditions, covenants or agreements set forth in this Agreement
by Company and continuance thereof for a period of thirty (30)
consecutive days;
(e) any representation or warranty made by Company or any
Subsidiary herein or in any instrument submitted pursuant hereto or by
any other party to the Loan Documents proves untrue or misleading in
any material adverse respect when made;
(f) default in the observance or performance of or failure to
comply with any of the conditions, covenants or agreements of Company
or any Subsidiary set forth in any of the other Loan Documents, and the
continuance thereof beyond any period of grace or cure specified in any
such document;
(g) (X) default (i) in the payment of any indebtedness for
borrowed money (other than Indebtedness hereunder or under the
Subordinated Debt Documents) of Company or any Subsidiary in excess of
One Million Dollars ($1,000,000) in the aggregate when due (whether by
acceleration or otherwise) and continuance thereof beyond any
applicable period of cure or (ii) failure to comply with the terms of
any other obligation of Company or any Subsidiary with respect to any
indebtedness for borrowed money (other than Indebtedness
hereunder or under the Subordinated Debt Documents) in excess of One
Million Dollars ($1,000,000) in the aggregate, which with the giving of
notice or passage of time or both would permit the holder or holders
thereto to accelerate such other indebtedness for borrowed money or
terminate its commitment thereunder, as applicable; or (Y) default by
Company under the Subordinated Debt Documents beyond any applicable
period of grace or cure.
(h) the rendering of any judgment(s) for the payment of money
in excess of the sum of One Million Dollars ($1,000,000) individually
or in the aggregate against Company or any Subsidiary, and such
judgments shall remain unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of forty five (45) consecutive days,
except as covered by adequate insurance with a reputable carrier and an
action is pending in which an active defense is being made with respect
thereto;
(i) the occurrence of a "reportable event", as defined in
ERISA, which is determined to constitute grounds for termination by the
Pension Benefit Guaranty Corporation of any Pension Plan subject to
Title IV of ERISA maintained or contributed to by or on behalf of the
Company or any of its Subsidiaries for the benefit of any of its
68
76
EXHIBIT 10.1
employees or for the appointment by the appropriate United States
District Court of a trustee to administer such Pension Plan and such
reportable event is not corrected and such determination is not revoked
within sixty (60) days after notice thereof has been given to the plan
administrator of such Pension Plan (without limiting any of Agent's or
any Bank's other rights or remedies hereunder), or the institution of
proceedings by the Pension Benefit Guaranty Corporation to terminate
any such Pension Plan or to appoint a trustee by the appropriate United
States District Court to administer any such Pension Plan, which in
either case could reasonably be expected to have a Material Adverse
Effect;
(j) the Company or any Subsidiary shall be dissolved or
liquidated (or any judgment, order or decree therefor shall be entered)
or; if a creditors' committee shall have been appointed for the
business of Company or any Subsidiary; or if Company or any Subsidiary
shall have made a general assignment for the benefit of creditors or
shall have been adjudicated bankrupt, or shall have filed a voluntary
petition in bankruptcy or for reorganization or to effect a plan or
arrangement with creditors or shall fail to pay its debts generally as
such debts become due in the ordinary course of business (except as
contested in good faith and for which adequate reserves are made in
such party's financial statements); or shall file an answer to a
creditor's petition or other petition filed against it, admitting the
material allegations thereof for an adjudication in bankruptcy or for
reorganization; or shall have applied for or permitted the appointment
of a receiver or trustee or custodian for any of its property or
assets; or such receiver, trustee or custodian shall have been
appointed for any of its property or assets (otherwise than upon
application or consent of Company or any of its Subsidiaries); or if an
order shall be entered approving any petition for reorganization of
Company or any Subsidiary; or the Company or any Subsidiary shall take
any action (corporate or other) authorizing or in furtherance any of
the actions described above in this subsection;
(k) the Parent shall fail to own 100% of the issued and
outstanding shares of stock of the Company (other than preferred stock
owned by Lyonnaise and Gestra) or a "Change in Control" under and as
defined in the Subordinated Debt Documents shall have occurred;
(l) (i) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (or trusts, limited liability
companies or partnerships established for his benefit or the benefit of
his family members in which he is trustee, manager or managing general
partner) and Equity Partners shall fail to hold at least fifty one
percent (51%) of the aggregate ownership interests in the Parent, and
(ii) Equity Partners shall fail to hold at least thirty three and
one-third percent (33 1/3%) of the aggregate ownership interests in the
Parent; and
(m) any provision of any Collateral Document shall at any time
for any reason cease to be valid, binding and enforceable against the
Parent, the Company or any of its Subsidiaries, as applicable, or the
validity, binding effect or enforceability thereof shall be contested
by any Person, or the Parent, the Company or any of its Subsidiaries
shall deny that it has any or further liability or obligation under any
Collateral Document, or any such
69
77
EXHIBIT 10.1
Loan Document shall be terminated, invalidated, revoked or set aside or
in any way cease to give or provide to the Banks and the Agent the
benefits purported to be created thereby.
10.2 Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (a) the Agent shall, upon being directed to do so by the
Majority Banks, declare the Revolving Credit Aggregate Commitment terminated;
(b) the Agent shall, upon being directed to do so by the Majority Banks, declare
the entire unpaid principal Indebtedness, including the Notes, immediately due
and payable, without presentment, notice or demand, all of which are hereby
expressly waived by Company; (c) upon the occurrence of any Event of Default
specified in subsection 10.1(j), above, and notwithstanding the lack of any
declaration by Agent under preceding clause (b), the entire unpaid principal
Indebtedness, including the Notes, shall become automatically and immediately
due and payable, and the Revolving Credit Aggregate Commitment shall be
automatically and immediately terminated; (d) the Agent shall, upon being
directed to do so by the Majority Banks, demand immediate delivery of cash
collateral, and the Company and each Account Party agrees to deliver such cash
collateral upon demand, in an amount equal to the maximum amount that may be
available to be drawn at any time prior to the stated expiry of all outstanding
Letters of Credit, and (e) the Agent shall, if directed to do so by the Majority
Banks or the Banks, as applicable (subject to the terms hereof), exercise any
remedy permitted by this Agreement, the other Loan Documents or law.
10.3 Rights Cumulative. No delay or failure of Agent and/or Banks in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Agent and Banks under this Agreement are cumulative and
not exclusive of any right or remedies which Banks would otherwise have.
10.4 Waiver by Company of Certain Laws. To the extent permitted by
applicable law, Company hereby agrees to waive, and does hereby absolutely and
irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on the Notes, or any security interest or mortgage contemplated by or granted
under or in connection with this Agreement. These waivers have been voluntarily
given, with full knowledge of the consequences thereof.
10.5 Waiver of Defaults. No Event of Default shall be waived by the
Banks except in a writing signed by an officer of the Agent in accordance with
Section 14.11 hereof. No single or partial exercise of any right, power or
privilege hereunder, nor any delay in the exercise thereof, shall preclude other
or further exercise of their rights by Agent or the Banks. No waiver of any
Event of Default shall extend to any other or further Event of Default. No
forbearance on the part of the Agent or the Banks in enforcing any of their
rights shall constitute a waiver of any of their rights. Company expressly
agrees that this Section may not be waived or modified by the Banks or Agent by
course of performance, estoppel or otherwise.
70
78
EXHIBIT 10.1
10.6 Set Off.
Upon the occurrence and during the continuance of any Event of Default,
each Bank may at any time and from time to time, without notice to the Company
but subject to the provisions of Section 11.3 hereof, (any requirement for such
notice being expressly waived by the Company) set off and apply against any and
all of the obligations of the Company now or hereafter existing under this
Agreement, whether owing to such Bank or any other Bank or the Agent, any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Bank to or for the
credit or the account of the Company and any property of the Company from time
to time in possession of such Bank, irrespective of whether or not such deposits
held or indebtedness owing by such Bank may be contingent and unmatured and
regardless of whether any Collateral then held by Agent or any Bank is adequate
to cover the Indebtedness. Promptly following any such setoff, such Bank shall
give written notice to Agent and to Company of the occurrence thereof. The
Company hereby grants to the Banks and the Agent a lien on and security interest
in all such deposits, indebtedness and property as collateral security for the
payment and performance of all of the obligations of the Company under this
Agreement. The rights of each Bank under this Section 10.6 are in addition to
the other rights and remedies (including, without limitation, other rights of
setoff) which such Bank may have.
11. PAYMENTS, RECOVERIES AND COLLECTIONS
11.1 Payment Procedure.
(a) All payments by Company of principal of, or interest on, the
Notes, or of Fees, shall be made without setoff or counterclaim on the
date specified for payment under this Agreement not later than 12:00 noon
(Detroit time) in immediately available funds to Agent, for the ratable
account of the Banks, at Agent's office located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, (care of Agent's Eurocurrency Lending
Office, for Eurocurrency-based Advances). Upon receipt by the Agent of
each such payment, the Agent shall make prompt payment in like funds
received to each Bank as appropriate, or, in respect of Eurocurrency-based
Advances, to such Bank's Eurocurrency Lending Office.
(b) Unless the Agent shall have been notified by Company prior to
the date on which any payment to be made by Company is due that Company
does not intend to remit such payment, the Agent may, in its sole
discretion and without obligation to do so, assume that the Company has
remitted such payment when so due and the Agent may, in reliance upon such
assumption, make available to each Bank on such payment date an amount
equal to such Bank's share of such assumed payment. If Company has not in
fact remitted such payment to the Agent each Bank shall forthwith on
demand repay to the Agent the amount of such assumed payment made
available or transferred to such Bank, together with the interest thereon,
in respect of each day from and including the date such amount was made
available by the Agent to such Bank to the date such amount is repaid to
the Agent at a rate per annum equal to (i) for Prime-based Advances, the
Federal Funds Effective Rate (daily average), as the same may vary from
time to time, and (ii) with respect to Eurocurrency-
71
79
EXHIBIT 10.1
based Advances, Agent's aggregate marginal cost (including the cost of
maintaining any required reserves or deposit insurance and of any fees,
penalties, overdraft charges or other costs or expenses incurred by
Agent) of carrying such amount.
(c) Subject to the definition of Interest Period, whenever any
payment to be made hereunder shall otherwise be due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall be included in computing interest, if
any, in connection with such payment.
(d) All payments to be made by the Company under this Agreement or
any of the Notes (including without limitation payments under the Swing
Line Note) shall be made without set-off or counterclaim, as aforesaid,
and without deduction for or on account of any present or future
withholding or other taxes of any nature imposed by any governmental
authority or of any political subdivision thereof or any federation or
organization of which such governmental authority may at the time of
payment be a member, unless Company is compelled by law to make payment
subject to such tax. In such event, Company shall:
(i) pay to the Agent for Agent's own account and/or, as the
case may be, for the account of the Banks (and, in the
case of Advances of the Swing Line, pay to the Swing
Line Bank which funded such Advances) such additional
amounts as may be necessary to ensure that the Agent
and/or such Bank or Banks receive a net amount equal to
the full amount which would have been receivable had
payment not been made subject to such tax; and
(ii) remit such tax to the relevant taxing authorities
according to applicable law, and send to the Agent or
the applicable Bank (including the Swing Line Bank) or
Banks, as the case may be, such certificates or
certified copy receipts as the Agent or such Bank or
Banks shall reasonably require as proof of the payment
by the Company, of any such taxes payable by the
Company.
As used herein, the terms "tax", "taxes" and "taxation" include all
existing or future income, stamp or other taxes (excluding, in the case of the
Agent and each Bank, net income and franchise taxes imposed on the Agent or such
Bank by the jurisdiction under the laws of which the Agent or such Bank is
organized or any political subdivision or taxing authority thereof or therein,
or by any jurisdiction in which such Bank's domestic lending office or
Eurocurrency Lending Office, as the case may be, is located or any political
subdivision or taxing authority thereof or therein) levies, imposts, duties,
charges, fees, deductions and withholdings and any restrictions or conditions
resulting in a charge together with interest thereon and fines and penalties
with respect thereto which may be imposed by reason of any violation or default
with respect to the law regarding such tax, assessed as a result of or in
connection with the transactions hereunder, or the payment and or receipt of
funds hereunder, or the payment or delivery of funds into or out of any
jurisdiction other than the United States (whether assessed against Company,
Agent or any of the Banks).
72
80
EXHIBIT 10.1
11.2 Application of Proceeds of Collateral. Notwithstanding anything to
the contrary in this Agreement, after an Event of Default, the proceeds of any
Collateral, together with any offsets, voluntary payments by Company or any
Subsidiary or others and any other sums received or collected in respect of the
Indebtedness, shall be applied, first, to the Notes and any Reimbursement
Obligations on a pro rata basis (or in such order and manner as determined by
the Majority Banks; subject, however, to the applicable Percentages of the loans
held by each of the Banks), next, to any other Indebtedness on a pro rata basis,
and then, if there is any excess, to Company or the applicable Subsidiary, as
the case may be. The application of such proceeds and other sums to the Notes
and the Reimbursement Obligations shall be based on each Bank's Percentage of
the aggregate of the loans.
11.3 Pro-rata Recovery. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of, or interest on, any of the Indebtedness in excess of
its pro rata share of payments then or thereafter obtained by all Banks upon
principal of and interest on all Indebtedness, such Bank shall purchase from the
other Banks such participations in the Notes and/or Reimbursement Obligation
held by them as shall be necessary to cause such purchasing Bank to share the
excess payment or other recovery ratably in accordance with the Percentage with
each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing holder,
the purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
12. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS
12.1 Reimbursement of Prepayment Costs. If Company makes any payment of
principal with respect to any Eurocurrency-based Advance or Quoted Rate
Advance on any day other than the last day of the Interest Period applicable
thereto (whether voluntarily, by acceleration, or otherwise), or if Company
fails to borrow any Eurocurrency-based Advance or Quoted Rate Advance after
notice has been given by Company to Agent in accordance with the terms hereof
requesting such Advance, or if Company fails to make any payment of principal or
interest in respect of a Eurocurrency-based Advance or Quoted Rate Advance when
due, then Company shall reimburse Agent and Banks, as the case may be on demand
for any resulting loss, cost or expense incurred by Agent and Banks, as the case
may be as a result thereof, including, without limitation, any such loss,
cost or expense incurred in obtaining, liquidating, employing or redeploying
deposits from third parties, whether or not Agent and Banks, as the case may be
shall have funded or committed to fund such Advance. Such amount payable by
Company to Agent and Banks, as the case may be may include, without limitation,
an amount equal to the excess, if any, of (a) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, refunded or
converted, for the period from the date of such prepayment or of such failure to
borrow, refund or convert, through the last day of the relevant Interest Period,
at the applicable rate of interest for said Advance(s) provided under this
Agreement, over (b) the amount of interest (as reasonably determined by Agent
and Banks, as the case may be) which would have accrued to Agent and Banks, as
the case may be on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market.
Calculation of any amounts payable
73
81
EXHIBIT 10.1
to any Bank under this paragraph shall be made as though such Bank shall have
actually funded or committed to fund the relevant Advance through the purchase
of an underlying deposit in an amount equal to the amount of such Advance and
having a maturity comparable to the relevant Interest Period; provided, however,
that any Bank may fund any Eurocurrency-based Advance or Quoted Rate Advance, as
the case may be in any manner it deems fit and the foregoing assumptions shall
be utilized only for the purpose of the calculation of amounts payable under
this paragraph. Upon the written request of Company, Agent and Banks shall
deliver to Company a certificate setting forth the basis for determining such
losses, costs and expenses, which certificate shall be conclusively presumed
correct, absent manifest error.
12.2 Agent's Eurocurrency Lending Office. For any Advance to which the
Eurocurrency-based Rate is applicable, if Agent shall designate a Eurocurrency
Lending Office which maintains books separate from those of the rest of Agent,
Agent shall have the option of maintaining and carrying the relevant Advance on
the books of such Eurocurrency Lending Office.
12.3 Circumstances Affecting Eurocurrency-based Rate Availability. If with
respect to any Interest Period, Agent or the Banks (after consultation with
Agent) shall determine that, by reason of circumstances affecting the interbank
markets generally, deposits in eurodollars in the applicable amounts are not
being offered to the Agent for such Interest Period, then Agent shall forthwith
give notice thereof to the Company. Thereafter, until Agent notifies Company
that such circumstances no longer exist, the obligation of the Banks to make
Eurocurrency-based Advances, and the right of Company to convert an Advance to
or refund an Advance as a Eurocurrency-based Advance shall be suspended, and the
Company shall repay in full (or cause to be repaid in full) the then outstanding
principal amount of each such Eurocurrency-based Advance covered hereby together
with accrued interest thereon, any amounts payable (but not yet paid) under
Section 12.1, hereof, and all other amounts payable hereunder on the last day of
the then current Interest Period applicable to such Advance. Upon the date for
repayment as aforesaid and unless Company notifies Agent to the contrary within
two (2) Business Days after receiving a notice from Agent pursuant to this
Section, such outstanding principal amount shall be converted to a Prime-based
Advance as of the last day of such Interest Period.
12.4 Laws Affecting Eurocurrency-based Advance Availability. In the event
that any applicable law, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not currently applicable to any Bank or the
Agent or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by the Agent or any of the Banks (or any of their respective
Eurocurrency Lending Offices) with any request or directive (whether or not
having the force of law) of any such authority, shall make it unlawful or
impossible for any of the Banks (or any of their respective Eurocurrency Lending
Offices) to honor its obligations hereunder to make or maintain any Advance with
interest at the Eurocurrency-based Rate, such Bank or the Agent shall forthwith
give notice thereof to Company and the Agent. Thereafter the Agent shall so
notify Company and the right of Company to convert an Advance or refund an
Advance as a Eurocurrency-based Advance, shall be suspended and thereafter
Company may select as Applicable Interest Rates only those which remain
available and which are permitted to be selected hereunder, and if any of the
Banks may not lawfully continue
74
82
EXHIBIT 10.1
to maintain an Advance to the end of the then current Interest Period
applicable thereto as a Eurocurrency-based Advance, Company shall immediately
prepay such Advance, together with interest to the date of payment, and any
amounts payable under Sections 12.1 or 12.6 with respect to such prepayment and
the applicable Advance shall immediately be converted to a Prime-based Advance
and the Prime-based Rate shall be applicable thereto.
12.5 Increased Cost of Eurocurrency-based Advances. In the event that any
change in applicable law, rule or regulation (whether domestic or foreign) now
or hereafter in effect and whether or not currently applicable to any Bank or
the Agent or any interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Agent or any of the Banks (or any of
their respective Eurocurrency Lending Offices) with any request or directive
(whether or not having the force of law) made by any such authority, central
bank or comparable agency after the date hereof:
(a) shall subject the Agent or any of the Banks (or any of their
respective Eurocurrency Lending Offices) to any tax, duty or other charge
with respect to any Advance or any Note or shall change the basis of
taxation of payments to the Agent or any of the Banks (or any of their
respective Eurocurrency Lending Offices) of the principal of or interest
on any Advance or any Note or any other amounts due under this Agreement
in respect thereof (except for changes in the rate of tax on the overall
net income or revenues of the Agent or of any of the Banks (or any of
their respective Eurocurrency Lending Offices) imposed by the United
States of America or the jurisdiction in which such Bank's principal
executive office is located); or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by the Agent or
any of the Banks (or any of their respective Eurocurrency Lending Offices)
or shall impose on the Agent or any of the Banks (or any of their
respective Eurocurrency Lending Offices) or the interbank markets any
other condition affecting any Advance or any of the Notes;
and the result of any of the foregoing is to increase the costs to the
Agent or any of the Banks of making, funding or maintaining any part of the
Indebtedness hereunder as a Eurocurrency-based Advance or to reduce the amount
of any sum received or receivable by the Agent or any of the Banks under this
Agreement or under the Notes in respect of a Eurocurrency-based Advance then
Agent or such Bank, as the case may be, shall promptly notify the Company of
such fact and demand compensation therefor and, within fifteen (15) days after
such notice, Company agrees to pay to Agent or such Bank such additional amount
or amounts as will compensate Agent or such Bank or Banks for such increased
cost or reduction. A certificate of Agent or such Bank setting forth the basis
for determining such additional amount or amounts necessary to compensate such
Bank or Banks shall accompany such demand for payment and shall be conclusively
presumed to be correct save for manifest error.
75
83
EXHIBIT 10.1
For purposes of this Section, a change in law, rule, regulation,
interpretation, administration, request or directive shall include, without
limitation, any change made or which becomes effective on the basis of a law,
rule, regulation, interpretation, administration, request or directive presently
in force, the effective date of which change is delayed by the terms of such
law, rule, regulation, interpretation, administration, request or directive.
12.6 Indemnity. The Company will indemnify Agent and each of the Banks
against any loss or expense which may arise or be attributable to the Agent's
and each Bank's obtaining, liquidating or employing deposits or other funds
acquired to effect, fund or maintain the Advances (a) as a consequence of any
failure by the Company to make any payment when due of any amount due hereunder
in connection with a Eurocurrency-based Advance, (b) due to any failure of the
Company to borrow on a date specified therefor in a Request for Revolving Credit
Advance or (c) due to any payment or prepayment of any Eurocurrency-based
Advance on a date other than the last day of the Interest Period for such
Advance, whether required by another provision of this Agreement or otherwise.
The Agent's and each Bank's (as applicable) calculations of any such loss or
expense shall be furnished to the Company and shall be conclusively presumed
correct, absent manifest error.
12.7 Other Increased Costs. In the event that after the date hereof the
adoption of or any change in any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Bank or Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank or Agent
with any guideline, request or directive of any such authority (whether or not
having the force of law), including any risk based capital guidelines, affects
or would affect the amount of capital required or expected to be maintained by
such Bank or Agent (or any corporation controlling such Bank or Agent) and such
Bank or Agent, as the case may be, determines that the amount of such capital is
increased by or based upon the existence of such Bank's or Agent's obligations
or Advances hereunder and such increase has the effect of reducing the rate of
return on such Bank's or Agent's (or such controlling corporation's) capital as
a consequence of such obligations or Advances hereunder to a level below that
which such Bank or Agent (or such controlling corporation) could have achieved
but for such circumstances (taking into consideration its policies with respect
to capital adequacy) by an amount deemed by such Bank or Agent to be material
(collectively, "Increased Costs"), then Agent or such Bank shall notify the
Company, and thereafter the Company shall pay to such Bank or Agent, as the case
may be, from time to time, upon request by such Bank or Agent, additional
amounts sufficient to compensate such Bank or Agent (or such controlling
corporation) for any increase in the amount of capital and reduced rate of
return which such Bank or Agent reasonably determines to be allocable to the
existence of such Bank's or Agent's obligations or Advances hereunder; provided,
however that the Company shall not be obligated to reimburse any Bank for any
Increased Costs pursuant to this Section 12.7 unless such Bank notifies Company
and the Agent within 180 days after such affected Bank has obtained actual
knowledge of such Increased Costs (but in any event within 365 days after such
affected Bank is required to comply with the applicable change in law). A
statement as to the amount of such compensation, prepared in good faith and in
reasonable detail by such Bank or Agent, as the case may be, shall be submitted
by such Bank or by Agent to the
76
84
EXHIBIT 10.1
Company, reasonably promptly after becoming aware of any event described in
this Section 12.7 and shall be conclusive, absent manifest error in computation.
12.8 Substitution of Banks. If (i) the obligation of any Bank to make
Eurocurrency-based Advances has been suspended pursuant to Section 12.3 or
Section 12.4 or (ii) any Bank has demanded compensation under Section 12.5 (in
each case, an "Affected Lender"), Company shall have the right, with the
assistance of the Agent, to seek a substitute lender or lenders (which may be
one or more of the Banks (the "Purchasing Lender" or "Purchasing Lenders") to
purchase the Notes and assume the commitment (including without limitation its
participations in Swing Line Advances and Letters of Credit) under this
Agreement of such Affected Lender. The Affected Lender shall be obligated to
sell its Notes and assign its commitment to such Purchasing Lender or Purchasing
Lenders within fifteen days after receiving notice from Company requiring it to
do so, at an aggregate price equal to the outstanding principal amount thereof
plus unpaid interest accrued thereon up to but excluding the date of the sale.
In connection with any such sale, and as a condition thereof, Company shall pay
to the Affected Lender all fees accrued for its account hereunder to but
excluding the date of such sale, plus, if demanded by the Affected Lender at
least two Business Days prior to such sale, (i) the amount of any compensation
which would be due to the Affected Lender under Section 12.1 if Company has
prepaid the outstanding Eurocurrency-based Advances of the Affected Lender on
the date of such sale and (ii) any additional compensation accrued for its
account under Section 12.5 to but excluding said date. Upon such sale, the
Purchasing Lender or Purchasing Lenders shall assume the Affected Lender's
commitment and the Affected Lender shall be released from its obligations
hereunder to a corresponding extent. If any Purchasing Lender is not already one
of the Banks, the Affected Lender, as assignor, such Purchasing Lender, as
assignee, Company and the Agent, with the subscribed consent of the Swing Line
Bank shall enter into an Assignment Agreement pursuant to Section 14.8 hereof,
whereupon such Purchasing Lender shall be a Bank party to this Agreement, shall
be deemed to be an assignee hereunder and shall have all the rights and
obligations of a Bank with a Percentage equal to its ratable share of the
Revolving Credit Aggregate Commitment of the Affected Lender. In connection with
any assignment pursuant to this Section 12.8, Company or the Purchasing Lender
shall pay to the Agent the administrative fee for processing such assignment
referred to in Section 14.8. Upon the consummation of any sale pursuant to this
Section 12.8, the Affected Lender, the Agent and Company shall make appropriate
arrangements so that, if required, each Purchasing Lender receives a new Notes,
as applicable.
13. AGENT
13.1 Appointment of Agent. Each Bank and the holder of each Note
irrevocably appoints and authorizes the Agent to act on behalf of such Bank or
holder under this Agreement and the other Loan Documents and to exercise such
powers hereunder and thereunder as are specifically delegated to Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto, including without limitation the power to execute or
authorize the execution of financing or similar statements or notices, and
other documents. In performing its functions and duties under this Agreement,
the Agent shall act solely as agent of the Banks and does not assume and shall
not be deemed to have assumed any obligation towards or relationship of agency
or trust with or for Company. Each Bank agrees (which agreement shall survive
any termination of this Agreement) to reimburse Agent for all reasonable
out-of-pocket expenses (including house and outside attorneys'
77
85
EXHIBIT 10.1
fees and disbursements) incurred by Agent hereunder or in connection herewith or
with an Event of Default or in enforcing the obligations of Company under this
Agreement or the other Loan Documents or any other instrument executed pursuant
hereto, and for which Agent is not reimbursed by Company, pro rata according to
such Bank's Percentage, but excluding any such expense resulting from Agent's
gross negligence or wilful misconduct. Agent shall not be required to take any
action under the Loan Documents, or to prosecute or defend any suit in respect
of the Loan Documents, unless indemnified to its satisfaction by the Banks
against loss, costs, liability and expense (excluding liability resulting from
its gross negligence or wilful misconduct). If any indemnity furnished to Agent
shall become impaired, it may call for additional indemnity and cease to do the
acts indemnified against until such additional indemnity is given.
13.2 Deposit Account with Agent. Company hereby authorizes Agent, in
Agent's sole discretion, to charge its general deposit account(s), if any,
maintained with Agent for the amount of any principal, interest, or other
amounts or costs due under this Agreement when the same become due and payable
under the terms of this Agreement or the Notes.
13.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Bank (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). None of Agent, its Affiliates nor any of their
respective directors, officers, employees or agents shall be liable to any Bank
for any action taken or omitted to be taken by it or them under this Agreement
or any document executed pursuant hereto, or in connection herewith or therewith
with the consent or at the request of the Majority Banks (or all of the Banks
for those acts requiring consent of all of the Banks) (except for its or their
own wilful misconduct or gross negligence), nor be responsible for or have any
duties to ascertain, inquire into or verify (a) any recitals or warranties made
by the Company, or any Subsidiary or Affiliate of the Company, or any officer
thereof contained herein or therein, (b) the effectiveness, enforceability,
validity or due execution of this Agreement or any document executed pursuant
hereto or any security thereunder, (c) the performance by Company of its
obligations hereunder or thereunder, or (d) the satisfaction of any condition
hereunder or thereunder, including without limitation the making of any Advance
or the issuance of any Letter of Credit. Agent and its Affiliates shall be
entitled to rely upon any certificate, notice, document or other communication
(including any cable, telegraph, telex, facsimile transmission or oral
communication) believed by it to be genuine and correct and to have been sent or
given by or on behalf of a proper person. Agent may treat the payee of any Note
as the holder thereof. Agent may employ agents and may consult with legal
counsel (who may be counsel for Company), independent public accountants and
other experts selected by it and shall not be liable to the Banks (except as to
money or property received by them or their authorized agents), for the
negligence or misconduct of any such agent selected by it with reasonable care
or for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
13.4 Successor Agent. Agent may resign as such at any time upon at least
30 days prior notice to Company and all Banks. If Agent at any time shall resign
or if the office of Agent shall become vacant for any other reason, Majority
Banks shall, by written instrument, appoint successor
78
86
EXHIBIT 10.1
agent(s) satisfactory to such Majority Banks, and, so long as no Default or
Event of Default has occurred and is continuing, to Company. Such successor
agent shall thereupon become the Agent hereunder, as applicable, and shall be
entitled to receive from the prior Agent such documents of transfer and
assignment as such successor Agent may reasonably request. Any such successor
Agent shall be a commercial bank organized under the laws of the United States
or any state thereof and shall have a combined capital and surplus of at least
$500,000,000. If a successor is not so appointed or does not accept such
appointment before the resigning Agent's resignation becomes effective, the
resigning Agent may appoint a temporary successor to act until such appointment
by the Majority Banks is made and accepted or if no such temporary successor is
appointed as provided above by the resigning Agent, the Majority Banks shall
thereafter perform all of the duties of the resigning Agent hereunder until such
appointment by the Majority Banks is made and accepted. Such successor Agent
shall succeed to all of the rights and obligations of the resigning Agent as if
originally named. The resigning Agent shall duly assign, transfer and deliver to
such successor Agent all moneys at the time held by the resigning Agent
hereunder after deducting therefrom its expenses for which it is entitled to be
reimbursed. Upon such succession of any such successor Agent, the resigning
agent shall be discharged from its duties and obligations hereunder, except for
its gross negligence or wilful misconduct arising prior to its resignation
hereunder, and the provisions of this Article 13 shall continue in effect for
the benefit of the resigning Agent in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
13.5 Agent in its Individual Capacity. Comerica Bank, its Affiliates and
their respective successors and assigns, shall have the same rights and powers
hereunder as any other Bank and may exercise or refrain from exercising the same
as though Comerica Bank were not the Agent. Comerica Bank and its Affiliates may
(without having to account therefor to any Bank) accept deposits from, lend
money to, and generally engage in any kind of banking, trust, financial advisory
or other business with Company (or its Subsidiaries) as if Comerica Bank were
not acting as Agent hereunder, and may accept fees and other consideration
therefor without having to account for the same to the Banks.
13.6 Credit Decisions. Each Bank acknowledges that it has, independently
of Agent and each other Bank and based on the financial statements of Company
and such other documents, information and investigations as it has deemed
appropriate, made its own credit decision to extend credit hereunder from time
to time. Each Bank also acknowledges that it will, independently of Agent and
each other Bank and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any document
executed pursuant hereto.
13.7 Agent's Fees. Company shall pay to Agent the annual agency fee and
such other fees and charges in the amounts and at the times set forth in the
letter agreement between Company and Agent dated May 28, 1997, as such letter
may be amended or restated with the Company's prior written consent from time to
time. The Agent's Fees described in this Section 13.7 shall not be refundable
under any circumstances.
79
87
EXHIBIT 10.1
13.8 Authority of Agent to Enforce Notes and This Agreement. Each Bank,
subject to the terms and conditions of this Agreement, authorizes the Agent with
full power and authority as attorney-in-fact to institute and maintain actions,
suits or proceedings for the collection and enforcement of the Notes and to file
such proofs of debt or other documents as may be necessary to have the claims of
the Banks allowed in any proceeding relative to Company, or any of its
Subsidiaries, or their respective creditors or affecting their respective
properties, and to take such other actions which Agent considers to be necessary
or desirable for the protection, collection and enforcement of the Notes, this
Agreement or the other Loan Documents.
13.9 Indemnification. The Banks agree to indemnify the Agent and its
Affiliates (to the extent not reimbursed by Company, but without limiting any
obligation of Company to make such reimbursement), ratably according to their
respective Percentages, from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever (including,
without limitation, fees and disbursements of counsel) which may be imposed on,
incurred by, or asserted against the Agent and its Affiliates in any way
relating to or arising out of this Agreement, any of the other Loan Documents or
the transactions contemplated hereby or any action taken or omitted by the Agent
and its Affiliates under this Agreement or any of the Loan Documents; provided,
however, that no Bank shall be liable for any portion of such claims, damages,
losses, liabilities, costs or expenses resulting from the Agent's or its
Affiliates's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent and its Affiliates promptly
upon demand for its ratable share of any reasonable out-of-pocket expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent and its Affiliates in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or any of the other
Loan Documents, to the extent that the Agent and its Affiliates is not
reimbursed for such expenses by Company, but without limiting the obligation of
Company to make such reimbursement. Each Bank agrees to reimburse the Agent and
its Affiliates promptly upon demand for its ratable share of any amounts owing
to the Agent and its Affiliates by the Banks pursuant to this Section, provided
that, if the Agent or its Affiliates is subsequently reimbursed by the Company
for such amounts, it shall refund to the Banks on a pro rata basis the amount of
any excess reimbursement. If the indemnity furnished to the Agent and its
Affiliates under this Section shall, in the judgment of the Agent, be
insufficient or become impaired, the Agent may call for additional indemnity
from the Banks and cease, or not commence, to take any action until such
additional indemnity is furnished.
13.10 Knowledge of Default. It is expressly understood and agreed that the
Agent shall be entitled to assume that no Event of Default has occurred and is
continuing, unless the officers of the Agent immediately responsible for matters
concerning this Agreement shall have been notified in a writing specifying such
Event of Default and stating that such notice is a "notice of default" by a Bank
or by Company. Upon receiving such a notice, the Agent shall promptly notify
each Bank of such Event of Default and provide each Bank with a copy of such
notice and, shall endeavor to provide such notice to the Banks within three (3)
Business Days (but without any liability whatsoever in the event of its failure
to do so). Agent shall also furnish the Banks, promptly upon
80
88
EXHIBIT 10.1
receipt, with copies of all other notices or other information required to be
provided by Company hereunder.
13.11 Agent's Authorization; Action by Banks. Except as otherwise expressly
provided herein, whenever the Agent is authorized and empowered hereunder on
behalf of the Banks to give any approval or consent, or to make any request, or
to take any other action on behalf of the Banks (including without limitation
the exercise of any right or remedy hereunder or under the other Loan
Documents), the Agent shall be required to give such approval or consent, or to
make such request or to take such other action only when so requested in writing
by the Majority Banks or the Banks, as applicable hereunder. Action that may be
taken by Majority Banks or all of the Banks, as the case may be (as provided for
hereunder) may be taken (i) pursuant to a vote at a meeting (which may be held
by telephone conference call) as to which all of the Banks have been given
reasonable advance notice, or (ii) pursuant to the written consent of the
requisite Percentages of the Banks as required hereunder, provided that all of
the Banks are given reasonable advance notice of the requests for such consent.
13.12 Enforcement Actions by the Agent. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agent will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Majority
Banks or all of the Banks, as the case may be (as provided for hereunder), shall
direct; provided, however, that the Agent shall not be required to act or omit
to act if, in the judgment of the Agent, such action or omission may expose the
Agent to personal liability or is contrary to this Agreement, any of the Loan
Documents or applicable law. Except as expressly provided above or elsewhere in
this Agreement or the other Loan Documents, no Bank (other than the Agent,
acting in its capacity as agent) shall be entitled to take any enforcement
action of any kind under any of the Loan Documents.
14. MISCELLANEOUS
14.1 Accounting Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done, unless otherwise specified herein,
in accordance with GAAP. Furthermore, all financial statements required to be
delivered hereunder, subject to year-end audit adjustments thereto, shall be
prepared in accordance with GAAP.
14.2 Consent to Jurisdiction. Company, Agent and Banks hereby irrevocably
submit to the non-exclusive jurisdiction of any United States Federal Court or
Michigan state court sitting in Detroit, Michigan in any action or proceeding
arising out of or relating to this Agreement or any of the Loan Documents and
Company, Agent and Banks hereby irrevocably agree that all claims in respect of
such action or proceeding may be heard and determined in any such United States
Federal Court or Michigan state court. Company irrevocably consents to the
service of any and all process in any such action or proceeding brought in any
court in or of the State of Michigan by the delivery of copies of such process
to Company at its address specified on the signature page hereto or by
81
89
EXHIBIT 10.1
certified mail directed to such address or such other address as may be
designated by Company in a notice to the other parties that complies as to
delivery with the terms of Section 14.6. Nothing in this Section shall affect
the right of the Banks and the Agent to serve process in any other manner
permitted by law or limit the right of the Banks or the Agent (or any of them)
to bring any such action or proceeding against Company or any Subsidiary or any
of its or their property in the courts with subject matter jurisdiction of any
other jurisdiction. Company hereby irrevocably waives any objection to the
laying of venue of any such suit or proceeding in the above described courts.
14.3 Law of Michigan. This Agreement and the Notes have been delivered at
Detroit, Michigan, and shall be governed by and construed and enforced in
accordance with the laws of the State of Michigan (without regard to its
conflict of laws provisions). Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
14.4 Interest. In the event the obligation of Company to pay interest on
the principal balance of the Notes is or becomes in excess of the maximum
interest rate which Company is permitted by law to contract or agree to pay,
giving due consideration to the execution date of this Agreement, then, in that
event, the rate of interest applicable with respect to such Bank's Percentage
shall be deemed to be immediately reduced to such maximum rate and all previous
payments in excess of the maximum rate shall be deemed to have been payments in
reduction of principal and not of interest.
14.5 Closing Costs and Other Costs; Indemnification. (a) Company agrees to
pay, or reimburse the Agent for payment of, on demand (i) all reasonable closing
costs and expenses, including, by way of description and not limitation, house
and outside attorney fees (but without duplication of fees and expenses for the
same services provided to the same party) and advances, appraisal and accounting
fees, and lien search fees incurred by Agent in connection with the commitment,
consummation and closing of the loans contemplated hereby or in connection with
the administration of this Agreement or any amendment, refinancing or
restructuring of the credit arrangements provided under this Agreement, (ii) all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing, recording or amendment of this Agreement
and the Loan Documents and the consummation of the transactions contemplated
hereby, and any and all liabilities with respect to or resulting from any delay
in paying or omitting to pay such taxes or fees, (iii) in connection with any
Default or Event of Default, all reasonable costs and expenses of the Agent or
any of the Banks (including reasonable fees and expenses of house and outside
counsel (but without duplication of fees and expenses for the same services) and
whether incurred through negotiations, legal proceedings or otherwise) in
connection with the amendment, waiver or enforcement of this Agreement, or the
Loan Documents or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement and (iv) all reasonable costs
and expenses of the Agent or any of the Banks (including reasonable fees and
expenses of house and outside counsel (but without duplication of fees and
expenses for the same services) in connection with any action or proceeding
relating to a court order, injunction or other
82
90
EXHIBIT 10.1
process or decree restraining or seeking to restrain the Agent or any of the
Banks from paying any amount under, or otherwise relating in any way to, any
Letter of Credit and any and all costs and expenses which any of them may incur
relative to any payment under any Letter of Credit. At Agent's option, all of
said amounts required to be paid by Company, if not paid when due, may be
charged by Agent as a Prime-based Advance against the Indebtedness.
(b) Company agrees to indemnify and save Agent and each of the Banks
harmless from all loss, cost, damage, liability or expenses, including
reasonable house and outside attorneys' fees and disbursements (but without
duplication of fees and expenses for the same services), incurred by Agent and
the Banks by reason of an Event of Default, or enforcing the obligations of
Company or any Subsidiary under this Agreement or any of the other Loan
Documents or in the prosecution or defense of any action or proceeding
concerning any matter growing out of or connected with this Agreement or any of
the Loan Documents, excluding, however, any loss, cost, damage, liability or
expenses arising solely as a result of the gross negligence or willful
misconduct of the party seeking to be indemnified under this Section 14.5(b).
(c) Company agrees to defend, indemnify and hold harmless Agent and each
of the Banks, and their respective employees, agents, officers and directors
from and against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses of whatever kind or nature arising out
of or related to (i) the presence, disposal, release or threatened release of
any Hazardous Materials on, from or affecting any premises owned or occupied by
Company or any of its Subsidiaries, (ii) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to such
Hazardous Materials, (iii) any lawsuit or other proceeding brought or
threatened, settlement reached or governmental order or decree relating to such
Hazardous Materials, (iv) the cost of removal of all Hazardous Materials from
all or any portion of any premises owned by Company or its Subsidiaries, (v) the
taking of necessary precautions to protect against the release of Hazardous
Materials on or affecting any premises owned by Company or any of its
Subsidiaries, (vi) complying with all Hazardous Material Laws and/or (vii) any
violation of Hazardous Material Laws, including without limitation, reasonable
attorneys and consultants fees, investigation and laboratory fees, environmental
studies required by Agent or any Bank in connection with the violation of
Hazardous Material Laws (whether before or after the occurrence of any Default
or Event of Default hereunder), court costs and litigation expenses, excluding
however, those arising as a result of its or their gross negligence or willful
misconduct. The obligations of Company under this Section 14.5(c) shall be in
addition to any and all other obligations and liabilities the Company may have
to Agent or any of the Banks at common law or pursuant to any other agreement.
14.6 Notices. Except as expressly provided otherwise in this Agreement, all
notices and other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing and shall be given by
personal delivery, by mail, by reputable overnight courier, by telex or by
facsimile and addressed or delivered to it at its address set forth on Schedule
14.6 or at such other address as may be designated by such party in a notice to
the other parties that complies as to delivery with the terms of this Section
14.6. Any notice, if personally delivered or if mailed and properly addressed
with postage prepaid and sent by registered or certified
83
91
mail, shall be deemed given when received or when delivery is refused; any
notice, if given to a reputable overnight courier and properly addressed, shall
be deemed given 2 Business Days after the date on which it was sent, unless it
is actually received sooner by the named addressee; and any notice, if
transmitted by telex or facsimile, shall be deemed given when received (answer
back confirmed in the case of telexes and receipt confirmed in the case of
telecopies). Agent may, but, except as specifically provided herein, shall not
be required to, take any action on the basis of any notice given to it by
telephone, but the giver of any such notice shall promptly confirm such notice
in writing or by telex or facsimile, and such notice will not be deemed to have
been received until such confirmation is deemed received in accordance with the
provisions of this Section set forth above. If such telephonic notice conflicts
with any such confirmation, the terms of such telephonic notice shall control.
14.7 Further Action. Company, from time to time, upon written request of
Agent will make, execute, acknowledge and deliver or cause to be made, executed,
acknowledged and delivered, all such further and additional instruments, and
take all such further action as may reasonably be required to carry out the
intent and purpose of this Agreement or the Loan Documents, and to provide for
Advances under and payment of the Notes, according to the intent and purpose
herein and therein expressed.
14.8 Successors and Assigns; Participations; Assignments.
(a) This Agreement shall be binding upon and shall inure to the benefit of
Company and the Banks and their respective successors and assigns.
(b) The foregoing shall not authorize any assignment by Company, of its
rights or duties hereunder, and no such assignment shall be made (or effective)
without the prior written approval of the Banks.
(c) The Company and Agent acknowledge that each of the Banks may at any
time and from time to time, subject to the terms and conditions hereof, assign
or grant participations in such Bank's rights and obligations hereunder and
under the other Loan Documents to any commercial bank, savings and loan
association, insurance company, pension fund, mutual fund, loan or debt fund,
commercial finance company or other similar financial institution, the identity
of which institution is approved by Company and Agent, such approval not to be
unreasonably withheld or delayed; provided, however, that (i) the approval of
Company shall not be required upon the occurrence and during the continuance of
a Default or Event of Default, and (ii) the approval of Company and Agent shall
not be required for any such sale, transfer, assignment or participation to the
Affiliate of an assigning Bank, any other Bank or any Federal Reserve Bank. The
Company authorizes each Bank to disclose to any prospective assignee or
participant, once approved by Company and Agent, any and all financial
information in such Bank's possession concerning the Company which has been
delivered to such Bank pursuant to this Agreement; provided that each such
prospective participant shall execute a confidentiality agreement consistent
with the terms of Section 14.12 hereof.
84
92
EXHIBIT 10.1
(d) Each assignment by a Bank of any portion of its rights and obligations
hereunder and under the other Loan Documents shall be made pursuant to an
Assignment Agreement substantially (as determined by Agent) in the form attached
hereto as Exhibit I (with appropriate insertions acceptable to Agent) and shall
be subject to the terms and conditions hereof, and to the following
restrictions:
(i) each assignment shall cover all of the Notes issued by Company
hereunder to the assigning Bank (and not any particular note
or notes), and shall be for a fixed and not varying percentage
thereof, with the same percentage applicable to each such
Note;
(ii) each assignment shall be in a minimum amount of the lesser of
(X) Ten Million Dollars ($10,000,000) and (Y) the entire
remaining amount of assigning Bank's interest in the Revolving
Credit (and participations in any outstanding Letters of
Credit);
(iii) no assignment shall be effective unless Agent has received
from the assignee (or from the assigning Bank) an assignment
fee of $3,500 for each such assignment.
In connection with any assignment, Company and Agent shall be entitled to
continue to deal solely and directly with the assigning Bank in connection with
the interest so assigned until (x) the Agent shall have received a notice of
assignment duly executed by the assigning Bank and an Assignment Agreement (with
respect thereto) duly executed by the assigning Bank and each assignee; and (y)
the assigning Bank shall have delivered to the Agent the original of each Note
held by the assigning Bank under this Agreement. From and after the date on
which the Agent shall notify Company and the assigning Bank that the foregoing
conditions shall have been satisfied and all consents (if any) required shall
have been given, the assignee thereunder shall be deemed to be a party to this
Agreement. To the extent that rights and obligations hereunder shall have been
assigned to such assignee as provided in such notice of assignment (and
Assignment Agreement), such assignee shall have the rights and obligations of a
Bank under this Agreement and the other Loan Documents (including without
limitation the right to receive fees payable hereunder in respect of the period
following such assignment). In addition, the assigning Bank, to the extent that
rights and obligations hereunder shall have been assigned by it as provided in
such notice of assignment (and Assignment Agreement), but not otherwise, shall
relinquish its rights and be released from its obligations under this Agreement
and the other Loan Documents.
Within five (5) Business Days following Company's receipt of notice from the
Agent that Agent has accepted and executed a notice of assignment and the duly
executed Assignment Agreement, Company shall, to the extent applicable, execute
and deliver to the Agent in exchange for any surrendered Note, new Note(s)
payable to the order of the assignee in an amount equal to the amount assigned
to it pursuant to such notice of assignment (and Assignment Agreement), and with
respect to the portion of the Indebtedness retained by the assigning Bank, to
the extent applicable, new Note(s) payable to the order of the assigning Bank in
an amount equal to the amount retained by
85
93
EXHIBIT 10.1
such Bank hereunder shall be executed and delivered by the Company. Agent, the
Banks and the Company acknowledge and agree that any such new Note(s) shall be
given in renewal and replacement of the surrendered Notes and shall not effect
or constitute a novation or discharge of the Indebtedness evidenced by any
surrendered Note, and each such new Note may contain a provision confirming such
agreement. In addition, promptly following receipt of such Notes, Agent shall
prepare and distribute to Company and each of the Banks a revised Schedule 1.2
to this Agreement setting forth the applicable new Percentages of the Banks
(including the assignee Bank), taking into account such assignment.
(e) Each Bank agrees that any participation agreement permitted hereunder
shall comply with all applicable laws and shall be subject to the following
restrictions (which shall be set forth in the applicable Participation
Agreement):
(i) such Bank shall remain the holder of its Notes hereunder,
notwithstanding any such participation;
(ii) except as expressly set forth in this Section 14.8(e) with
respect to rights of setoff and the benefits of Section 12
hereof, a participant shall have no direct rights or remedies
hereunder;
(iii) a participant shall not reassign or transfer, or grant any
sub-participations in its participation interest hereunder or
any part thereof; and
(iv) such Bank shall retain the sole right and responsibility to
enforce the obligations of the Company relating to the Notes
and the other Loan Documents, including, without limitation,
the right to proceed against any Guaranties, or cause Agent
to do so (subject to the terms and conditions hereof), and
the right to approve any amendment, modification or waiver of
any provision of this Agreement without the consent of the
participant, except for those matters covered by Section 14.11
(a) through (e) and (h) hereof (provided that a participant
may exercise approval rights over such matters only on an
indirect basis, acting through such Bank, and Company, Agent
and the other Banks may continue to deal directly with such
Bank in connection with such Bank's rights and duties
hereunder).
Company agrees that each participant shall be deemed to have the right of setoff
under Section 10.6 hereof in respect of its participation interest in amounts
owing under this Agreement and the other Loan Documents to the same extent as if
the Indebtedness were owing directly to it as a Bank under this Agreement, shall
be subject to the pro rata recovery provisions of Section 11.3 hereof and shall
be entitled to the benefits of Section 12 hereof. The amount, terms and
conditions of any participation shall be as set forth in the participation
agreement between the issuing Bank and the Person purchasing such participation,
and none of the Company, the Agent and the other Banks shall have any
responsibility or obligation with respect thereto, or to any Person to whom any
such participation may be issued. No such participation shall relieve any
issuing Bank of any of its
86
94
EXHIBIT 10.1
obligations under this Agreement or any of the other Loan Documents, and all
actions hereunder shall be conducted as if no such participation had been
granted.
(f) Nothing in this Agreement, the Notes or the other Loan Documents,
expressed or implied, is intended to or shall confer on any Person other than
the respective parties hereto and thereto and their successors and assignees and
participants permitted hereunder and thereunder any benefit or any legal or
equitable right, remedy or other claim under this Agreement, the Notes or the
other Loan Documents.
14.9 Indulgence. No delay or failure of Agent and the Banks in exercising
any right, power or privilege hereunder shall affect such right, power or
privilege nor shall any single or partial exercise thereof preclude any further
exercise thereof, nor the exercise of any other right, power or privilege. The
rights of Agent and the Banks hereunder are cumulative and are not exclusive of
any rights or remedies which Agent and the Banks would otherwise have.
14.10 Counterparts. This Agreement may be executed in several counterparts,
and each executed copy shall constitute an original instrument, but such
counterparts shall together constitute but one and the same instrument.
14.11 Amendment and Waiver. No amendment or waiver of any provision of this
Agreement or any other Loan Document, nor consent to any departure by Company or
any Subsidiary therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) or, if this Agreement expressly so requires with
respect to the subject matter thereof, by all Banks (and, with respect to any
amendments to this Agreement or the other Loan Documents, by Company or the
Subsidiaries which are signatories thereto), and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Banks, do any of the following: (a)
increase any Bank's commitments hereunder, (b) reduce the principal of, or
interest on, the Notes or any Fees or other amounts payable hereunder, (c)
postpone any date fixed for any payment of principal of, or interest on, the
Notes or any Fees or other amounts payable hereunder, (d) waive any Event of
Default specified in Sections 10.1(a) or (b) hereof, (e) except as expressly
permitted hereunder, or under the Collateral Documents, release or defer the
granting or perfecting of a lien or security interest in any Collateral or
release any guaranty or similar undertaking provided by any Person except as
shall be otherwise expressly permitted in this Agreement or any other Loan
Document, provided however that Agent shall be entitled to release any
Collateral which the Company or any Subsidiary is permitted to sell or transfer
under the terms of this Agreement or the other Loan Documents without notice to
or any further action or consent of the Banks (and without the paydown or other
reduction of Indebtedness, except to the extent expressly required hereunder);
(f) terminate or modify any indemnity provided to the Banks hereunder or under
the other Loan Documents, except as shall be otherwise expressly provided in
this Agreement or any other Loan Document, (g) take any action which requires
the approval or consent of all Banks pursuant to the terms of this Agreement or
any other Loan Document, (h) change the aggregate unpaid principal amount of the
Notes which shall be required for the Banks or any of them to take any action
under
87
95
EXHIBIT 10.1
this Agreement or any Loan Document or (i) change the definition of "Majority
Banks" or this Section 14.11; provided further, that no amendment, waiver or
consent shall, unless in writing signed by the Swing Line Bank do any of the
following: (x) reduce the principal of, or interest on, the Swing Line Note or
(y) postpone any date fixed for any payment of principal of, or interest on, the
Swing Line Note; and provided further, however, that no amendment, waiver, or
consent shall, unless in writing and signed by the Agent in addition to all the
Banks, affect the rights or duties of the Agent under this Agreement or any
other Loan Document. All references in this Agreement to "Banks" or "the Banks"
shall refer to all Banks, unless expressly stated to refer to Majority Banks.
14.12 Confidentiality. Each Bank agrees that it will not disclose without
the prior consent of Company (other than to its employees, or to employees of
any of its Affiliates, its Subsidiaries, another Bank or to its auditors or
counsel) any information with respect to Company, which is furnished pursuant to
this Agreement or any of the other Loan Documents; provided that any Bank may
disclose any such information (a) as has become generally available to the
public or has been lawfully obtained by such Bank from any third party under no
duty of confidentiality to Company, (b) as may be required or appropriate in any
report, statement or testimony submitted to, or in respect to any inquiry, by,
any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Bank, including the Board of Governors of the Federal
Reserve System of the United States, the Office of the Comptroller of the
Currency or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in respect to any summons or subpoena or in connection
with any litigation, (d) in order to comply with any law, order, regulation or
ruling applicable to such Bank, and (e) to any permitted transferee or assignee
or to any approved participant of, or with respect to, the Notes, as aforesaid.
14.13 Withholding Taxes. If any Bank is not incorporated under the laws of
the United States or a state thereof, such Bank shall promptly deliver to the
Agent two executed copies of (i) Internal Revenue Service Form 1001 specifying
the applicable tax treaty between the United States and the jurisdiction of such
Bank's domicile which provides for the exemption from withholding on interest
payments to such Bank, (ii) Internal Revenue Service Form 4224 evidencing that
the income to be received by such Bank hereunder is effectively connected with
the conduct of a trade or business in the United States or (iii) other evidence
satisfactory to the Agent and Company that such Bank is exempt from United
States income tax withholding with respect to such income. Such Bank shall amend
or supplement any such form or evidence as required to insure that it is
accurate, complete and non-misleading at all times. Promptly upon notice from
the Agent of any determination by the Internal Revenue Service that any payments
previously made to such Bank hereunder were subject to United States income tax
withholding when made, such Bank shall pay to the Agent the excess of the
aggregate amount required to be withheld from such payments over the aggregate
amount actually withheld by the Agent.
14.14 Taxes and Fees. Should any tax (other than as a result of a Bank's
failure to comply with Section 14.13 or a tax based upon the net income or
capitalization of any Bank or the Agent by any jurisdiction where a Bank or
Agent is located), recording or filing fee become payable in respect of this
Agreement or any of the other Loan Documents or any amendment, modification or
88
96
EXHIBIT 10.1
supplement hereof or thereof, the Company agrees to pay the same, together with
any interest or penalties thereon arising from the Company's act or omission,
and agrees to hold the Agent and the Banks harmless with respect thereto.
Notwithstanding the foregoing, nothing contained in this Section 14.14 shall
affect or reduce the rights of any Bank or the Agent under Section 12.7 hereof.
14.15 WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND THE COMPANY AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE BANKS, THE AGENT, NOR COMPANY
SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN
WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE
BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE BANKS AND THE AGENT OR
COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
14.16 Complete Agreement; Conflicts. This Agreement, the Notes, any
Requests for Revolving Credit Advance, and Requests for Swing Line Advance
hereunder, and the Loan Documents contain the entire agreement of the parties
hereto, superseding all prior agreements, discussions and understandings
relating to the subject matter hereof, and none of the parties shall be bound by
anything not expressed in writing. In the event of any conflict between the
terms of this Agreement and the other Loan Documents, this Agreement shall
govern.
14.17 Severability. In case any one or more of the obligations of Company
under this Agreement, the Notes or any of the other Loan Documents shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining obligations of Company shall not in any way
be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of Company under this Agreement, the Notes or
any of the other Loan Documents in any other jurisdiction.
14.18 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions hereof.
14.19 Construction of Certain Provisions. If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
89
97
EXHIBIT 10.1
14.20 Independence of Covenants. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
14.21 Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of Company or any party to any of the
Loan Documents made herein or in any of the Loan Documents or in any
certificate, report, financial statement or other document furnished by or on
behalf of Company or any Subsidiary in connection with this Agreement or any of
the Loan Documents shall be deemed to have been relied upon by the Banks,
notwithstanding any investigation heretofore or hereafter made by any Bank or on
such Bank's behalf, and those covenants and agreements of Company set forth in
Section 12.6 hereof (together with any other indemnities of Company or any
Subsidiary contained elsewhere in this Agreement or in any of the other Loan
Documents) and of Banks set forth in Section 13.9 hereof shall survive the
repayment in full of the Indebtedness and the termination of the Revolving
Credit Aggregate Commitment.
14.22 Complete Agreement; Amendment and Restatement. This Agreement, the
Notes, any Requests for Advance or Letters of Credit hereunder, the other Loan
Documents and any agreements, certificates, or other documents given to secure
the Indebtedness, contain the entire agreement of the parties hereto, and none
of the parties hereto shall be bound by anything not expressed in writing. This
Agreement constitutes an amendment and restatement of the Prior Credit
Agreement, which Prior Credit Agreement is fully superseded and amended and
restated in its entirety hereby; provided, however, that the Indebtedness
governed by the Prior Credit Agreement shall remain outstanding and in full
force and effect and provided further that this Agreement does not constitute a
novation of such Indebtedness.
* * *
[Signatures follow on succeeding pages]
90
98
EXHIBIT 10.1
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK, AQUA-CHEM, INC.
as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------- ------------------------
Its: First Vice President Its: VP & CFO
----------------------- ------------------------
SWING LINE BANK: COMERICA BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Its: First Vice President
-------------------------
BANKS: COMERICA BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Its: First Vice President
-------------------------
[FIRST SIGNATURE PAGE TO CREDIT AGREEMENT]
99
EXHIBIT 10.1
SCHEDULE 1.1
PRICING MATRIX
APPLICABLE FEE PERCENTAGE
AND REVOLVING CREDIT MARGINS
BASIS FOR PRICING ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ LEVEL V**
========================= ================ ================ ================ ================ ================
Consolidated Funded > 3.0 to 1 > 3.5 to 1 > 4.0 to 1 > 4.50 to 1
- - - -
Debt to Consolidated < 3.0 to 1 but but but
EBITDA Ratio < 3.5 to 1 < 4.0 to 1 < 4.50 to 1
Revolving Credit 0.25% 0.30% 0.35% 0.425% 0.50%
Facility Fee
Eurocurrency Margin -- 1.00% 1.20% 1.40% 1.575% 1.75%
Revolving Credit
Prime-based Margin -- 0% 0% 0% 0% .0%
Revolving Credit
Letter of Credit Fee
(exclusive of Facing Fee) 1.00% 1.20% 1.40% 1.575% 1.75%
------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
** Anticipated Initial ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇ 10.1
EXHIBIT A
REQUEST FOR REVOLVING CREDIT ADVANCE
No. Dated:
------------- ------------
To: Comerica Bank - Agent
Re: Aqua-Chem Revolving Credit and Term Loan Agreement dated as of July 31,
1997 (as amended or otherwise modified from time to time, the
"Agreement") by and among the lenders from time to time parties thereto
(collectively, the "Banks"), Comerica Bank, as Agent for the Banks (the
"Agent"), and Aqua-Chem, Inc. (the "Company")
Pursuant to the Agreement, the Company requests an Advance from Banks
as follows:
A. Date of Advance:
-------------
B. Amount of Advance:
$
----------------------
[ ] Comerica Bank Account No.
--------------
[ ] Other:
---------------------------------
---------------------------------
C. Type of Activity:
1. Advance [ ]
2. Refunding [ ]
of a Revolving Credit Advance [ ]
of a Swing Line Advance [ ]
3. Conversion [ ]
D. Interest Rate:
1. Prime-based Rate [ ]
2. Eurocurrency-based Rate [ ]
E. Interest Period (for Eurocurrency-based Advances only):
101
EXHIBIT 10.1
1. One (1) Month [ ](1)
2. Two (2) Months [ ]
3. Three (3) Months [ ]
4. Six (6) Months [ ]
The Company certifies to the matters specified in Section 2.3(e) of the
Agreement.
AQUA-CHEM, INC.
By:_____________________________
Its:_____________________________
----------------------
(1) Until January 31, 1998, only one (1) month Interest Period available,
except as otherwise permitted by Agent.
102
EXHIBIT 10.1
EXHIBIT B
REVOLVING CREDIT NOTE
$ July 31, 1997
--------------
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, Aqua-Chem,
Inc., a Delaware corporation ("Company"), promises to pay to the order of
[insert Bank] ("Bank") at Detroit, Michigan, in care of Agent, in lawful money
of the United States of America, the sum of [Insert amount derived from
Percentages] Dollars ($ ), or so much of said sum as may from time to
time have been advanced and then be outstanding hereunder pursuant to the
Aqua-Chem, Inc. Revolving Credit and Term Loan Agreement dated as of July 31,
1997, made by and among the Company, certain banks, including the Bank, and
Comerica Bank as Agent for such banks, as the same may be amended or otherwise
modified from time to time (the "Agreement"), together with interest thereon as
hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the
Applicable Interest Rate from time to time applicable thereto under the
Agreement or as otherwise determined thereunder, and interest shall be computed,
assessed and payable as set forth in the Agreement.
This Note is a note under which advances (including refundings and
conversions), repayments and readvances may be made from time to time, but only
in accordance with the terms and conditions of the Agreement. This Note
evidences borrowings under, is subject to, is secured in accordance with, and
may be accelerated or matured under, the terms of the Agreement, to which
reference is hereby made. Definitions and terms of the Agreement are hereby
incorporated by reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of Michigan
(without regard to its conflict of laws principles).
Company hereby waives presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agrees that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
103
EXHIBIT 10.1
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
AQUA-CHEM, INC.
By:
-----------------------------
Its:
-----------------------------
Signature Page
Revolving Credit Note
2
104
EXHIBIT 10.1
EXHIBIT C
NOTICE OF LETTERS OF CREDIT
TO: Members of the Bank Group
RE: Aqua-Chem Revolving Credit and Term Loan Agreement dated as of July 31,
1997 (as amended or otherwise modified from time to time, the
"Agreement") by and among the lenders from time to time parties thereto
(collectively, the "Banks"), Comerica Bank, as Agent for the Banks (the
"Agent"), and Aqua-Chem, Inc. (the "Company")
On , 19 ,(2) Issuing Bank, in accordance with Article 3 of
the Agreement, issued its Letter of Credit number , in favor of
(3) for the account of Company. The face amount of such Letter of Credit is
$ . The amount of each Bank's participation in the Letter of Credit is
as follows:(4)
Comerica Bank $
------------------
------------------------- $
------------------
------------------------- $
------------------
This notification is delivered this ___ day of _____, _____, pursuant
to Section 3.3 of the Agreement. Except as otherwise defined, capitalized terms
used herein have the meanings given them in the Agreement.
Signed:
COMERICA BANK, AS AGENT
By:
-------------------------
Its:
-------------------------
--------------------
(2) Date of Issuance
(3) Beneficiary
(4) Amounts based on Percentages
105
EXHIBIT 10.1
EXHIBIT D
REQUEST FOR SWING LINE ADVANCE
No. Dated:
To: Comerica Bank, as Swing Line Bank
Re: Aqua-Chem Revolving Credit and Term Loan Agreement dated as of July 31,
1997 (as amended or otherwise modified from time to time, the
"Agreement") by and among the lenders from time to time parties thereto
(collectively, the "Banks"), Comerica Bank, as Agent for the Banks (the
"Agent"), and Aqua-Chem, Inc. (the "Company")
Pursuant to the Agreement, the Company requests a Swing Line Advance
from the Swing Line Bank as follows:
A. Date of Advance:
-------------------
B. Amount of Advance:
$
----------------------
[ ] Comerica Bank Account No.
--------------
[ ] Other:
---------------------------------
---------------------------------
C. Interest Rate:
1. Prime-based Rate [ ]
2. Quoted Rate [ ]
D. Interest Period:
1. days(5)
-------
-----------------
(5) Insert up to 30 days.
106
EXHIBIT 10.1
The Company certifies to the matters specified in Section 4A.3(e) of
the Agreement.
AQUA-CHEM, INC.
By:
-----------------------------
Its:
-----------------------------
Swing Line Bank Approval:
----------------
2
107
EXHIBIT 10.1
EXHIBIT E
SWING LINE NOTE
$2,500,000 July 31, 1997
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, Aqua-Chem,
Inc., a Delaware corporation ("Company"), promises to pay to the order of
Comerica Bank ("Bank") at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ in lawful money
of the United States of America, the sum of Two Million Five Hundred Thousand
Dollars ($2,500,000), or so much of said sum as may from time to time have been
advanced and then be outstanding hereunder pursuant to Article 4A of the
Aqua-Chem Revolving Credit and Term Loan Agreement, dated as of July 31, 1997,
executed by and among the Company, certain banks, including the Bank, and
Comerica Bank as Agent for such banks, as the same may be amended or otherwise
modified from time to time (the "Agreement"), together with interest thereon as
hereinafter set forth.
The unpaid principal indebtedness from time to time outstanding under
this Note shall be due and payable on the last day of the Interest Period
applicable thereto or as otherwise set forth in the Agreement, provided that no
Swing Line Advance may mature or be payable on a day later than the Revolving
Credit Maturity Date.
Each of the Swing Line Advances made hereunder shall bear interest at
the Prime-based Rate or the Quoted Rate from time to time applicable thereto
under the Agreement or as otherwise determined thereunder, and interest shall be
computed, assessed and payable as set forth in the Agreement.
This Note is a note under which advances, repayments and readvances may
be made from time to time, but only in accordance with the terms and conditions
of the Agreement. This Note evidences borrowings under, is subject to, is
secured in accordance with, and may be accelerated or matured under, the terms
of the Agreement, to which reference is hereby made. Definitions and terms of
the Agreement are hereby incorporated by reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of Michigan
(without regard to its conflict of laws provisions).
Company hereby waives presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agrees that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
108
EXHIBIT 10.1
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
AQUA-CHEM, INC.
By:
-----------------------------
Its:
-----------------------------
Signature Page
Swing Line Note
2
109
EXHIBIT 10.1
EXHIBIT F
SWING LINE BANK PARTICIPATION CERTIFICATE
------------------, ----
[Name of Bank]
-------------------------
-------------------------
Ladies and Gentlemen:
Pursuant to subsection 4A.5(b) of the Revolving Credit and Term Loan
Agreement dated as of July 31, 1997, among Aqua-Chem, Inc., the Banks named
therein and Comerica Bank, as Agent, the undersigned hereby acknowledges receipt
from you of $___________________ as payment for a participating interest in the
following Swing Line Loan:
Date of Swing Line Loan:
--------------------------------
Principal Amount of Swing Line Loan:
--------------------
The participation evidenced by this certificate shall be subject to the terms
and conditions of the Revolving Credit Agreement including without limitation
Section 4A.5(b) thereof.
Very truly yours,
COMERICA BANK, as Agent
By:
-------------------------------
Its:
------------------------------
110
EXHIBIT 10.1
EXHIBIT G
TERM NOTE
Detroit, Michigan
$ July 31, 1997
-------------------
FOR VALUE RECEIVED, Aqua-Chem, Inc., a Delaware corporation (the
"Company") promises to pay to the order of [insert Bank] ("Bank"), in care of
Agent, at Detroit, Michigan, the principal sum of [insert amount derived from
Percentages] Dollars ($_____________) in lawful money of the United States of
America payable in quarterly principal installments each in the amount and on
the dates set forth in the Agreement (as defined below) until the Term Loan
Maturity Date, when the entire unpaid balance of principal and interest thereon
shall be due and payable. Interest shall be payable at the rate (including the
default rate) and on the dates provided in the Aqua-Chem Revolving Credit and
Term Loan Agreement (as amended or otherwise modified, the "Agreement") dated as
of July 31, 1997, made by and among the Company, certain banks including the
Bank, and Comerica Bank as agent for such banks. Capitalized terms used herein,
unless defined to the contrary, have the meanings given them in the Agreement.
This Note evidences borrowing under, is subject to, may be accelerated
or matured under, and may be prepaid in accordance with, the terms of the
Agreement, to which reference is hereby made.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agrees that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note. Any transferees of,
or endorser, guarantor or surety paying this Note in full shall succeed to all
rights of Bank, and Bank shall be under no further responsibility for the
exercise thereof or the loan evidenced hereby.
111
EXHIBIT 10.1
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
AQUA-CHEM, INC.
By:
-----------------------------
Its:
-----------------------------
Signature Page
Term Note
2
112
EXHIBIT 10.1
EXHIBIT H
COVENANT COMPLIANCE REPORT
To: Comerica Bank, as Agent
Re: Aqua-Chem Revolving Credit and Term Loan Agreement dated as of
July 31, 1997 (as amended or otherwise modified from time to
time, the "Agreement") by and among the lenders from time to
time parties thereto (collectively, the "Banks"), Comerica
Bank, as Agent for the Banks (the "Agent"), and Aqua-Chem,
Inc. (the "Company")
This Covenant Compliance Report ("Report") is furnished pursuant to
Section 8.2 of the Agreement and sets forth various information as of
_____________, 19__ (the "Computation Date").
1. Base Tangible Net Worth. On the Computation Date, Adjusted
Consolidated Tangible Net Worth which is required to be not less than
$______________, was $________________ as computed in the supporting documents
attached hereto as Schedule 1.
2. Fixed Charge. On the Computation Date, the Fixed Charge Coverage
Ratio, which is required to be not less than _____ to 1.0 as of the fiscal month
then ending was _____ to 1.0 as computed in the supporting documents attached as
Schedule 2.
3. Senior Funded Debt to Consolidated EBITDA Ratio. On the Computation
Date, the Senior Funded Debt to Consolidated EBITDA Ratio, which is required to
be not more than _______________ to 1.0 as of the fiscal month then ending for
the twelve months then ended was ______ to 1.0, as computed in the supporting
documents attached hereto as Schedule 3.
4. Senior Funded Debt to Capitalization Ratio. On the Computation Date,
the ratio of Senior Funded Debt to Capitalization which is required to be not
more than ____________ to 1.0 as of the fiscal month then ending, was
__________ to 1.0, as computed in the supporting documents attached hereto as
Schedule 4.
5. Acquisition of Fixed or Capital Assets. On the Computation Date, the
aggregate amount of outstanding Debt used to finance fixed or capital assets,
which is required to be not more than $1,000,000 was $______________.
6. Debt. On the Computation Date,
(a) the aggregate amount of Debt assumed pursuant to a
Permitted Acquisition, which shall not exceed $1,500,000 at
any one time outstanding, was $_____, as described on Schedule
6(a);
113
EXHIBIT 10.1
(b) the aggregate amount of Debt under the overdraft line of
credit maintained by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of Canada Limited with a
bank in Canada, which shall not exceed $500,000 at any one
time outstanding, was $ ;
(c) the aggregate amount of "additional Debt" pursuant to
Section 9.1(o) of the Agreement, which shall not exceed
$250,000 at any one time outstanding, was
$ .
7. Interest Coverage. On the Computation Date, the Interest Coverage
Ratio, which is required to be not less than _______ for the fiscal
quarter then ending, was _______, as computed in the supporting
documents attached hereto as Schedule 7.
The undersigned officer of Company hereby certifies that:
A. All of the information set forth in this Report (and in any Schedule attached
hereto) is true and correct in all material respects.
B. As of the Computation Date, the Company and its Subsidiaries have observed
and performed all of their covenants and other agreements contained in the
Agreement and in the Notes and any other Loan Documents to be observed,
performed and satisfied by them.
C. I have reviewed the Agreement and this Report is based on an examination
sufficient to assure that this Report is accurate.
D. Except as stated in Schedule D hereto (which shall describe any existing
Default or Event of Default and the notice and period of existence thereof and
any action taken with respect thereto or contemplated to be taken by Company),
no Default or Event or Default has occurred and is continuing on the date of
this Report.
Capitalized terms used in this Report and in the schedules hereto, unless
specifically defined to the contrary, have the meanings given to them in the
Agreement.
2
114
EXHIBIT 10.1
IN WITNESS WHEREOF, Company has caused this Report to be executed and
delivered by its duly authorized officer this ___ day of _______________, 19___.
AQUA-CHEM, INC.
By:
----------------------------------
Its:
----------------------------------
3
115
EXHIBIT 10.1
EXHIBIT I
ASSIGNMENT AGREEMENT
Date:
--------
To: COMERICA BANK, in its capacity as Agent ("Agent")
Re: Aqua-Chem Revolving Credit and Term Loan Agreement dated as of July 31,
1997 (as amended or otherwise modified from time to time, the "Credit
Agreement") by and among the lenders from time to time parties thereto
(collectively, the "Banks"), Comerica Bank, as Agent for the Banks (the
"Agent"), and Aqua-Chem, Inc. (the "Company")
Ladies and Gentlemen:
Reference is made to Sections 14.8 (c) and (d) of the Credit Agreement.
Unless otherwise defined herein or the context otherwise requires, all initially
capitalized terms used herein without definition shall have the meanings
specified in the Credit Agreement.
This Agreement constitutes notice to each of you of the proposed
assignment and delegation by ______________ (the "Assignor") to ____________
(the "Assignee"), and the Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, as of the
Effective Date (as defined below), a __% undivided interest in each of
Assignor's rights and obligations under the Credit Agreement, its Notes
(including any participations in any outstanding Letters of Credit) and the
other Loan Documents such that, after giving effect to the foregoing assignment
and assumption, [and the other assignments by Assignor to ______________ on the
date hereof,] the Assignee's interest in the Revolving Credit shall equal
$______________ and in the Term Loan shall equal $______________ and the
Assignee's Percentage shall equal ___%.
The Assignor hereby instructs the Agent to make all payments from and
including the Effective Date hereof in respect of the interest assigned hereby,
directly to the Assignee. The Assignor and the Assignee agree that all interest
and fees accrued up to, but not including, the Effective Date of the assignment
and delegation being made hereby are the property of the Assignor, and not the
Assignee. The Assignee agrees that, upon receipt of any such interest or fees
accrued up to the Effective Date, or any other payments in respect of the
interest assigned hereby applicable to the period prior to the Effective Date,
the Assignee will promptly remit the same to the Assignor in the same funds
received by the Assignee.
The Assignor and the Assignee agree that all interest and fees accruing
from and after the Effective Date of the assignment and delegation being made
hereby are the property of the Assignee, and not the Assignor. The Assignor
agrees that, upon receipt of any such interest or fees accruing from and after
the Effective Date or any other payments in respect of the interest
assigned hereby
116
EXHIBIT 10.1
applicable to the period from and after the Effective Date, the Assignor will
promptly remit the same to the Assignee in the same funds received by the
Assignor.
The Assignee hereby confirms that it has received a copy of the Credit
Agreement and the exhibits and schedules referred to therein, and all other Loan
Documents which it considers necessary, together with copies of the other
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the loans thereunder. The Assignee acknowledges and
agrees that it: (a) has made and will continue to make such inquiries and has
taken and will take such care on its own behalf as would have been the case had
its Commitment been granted and its loans been made directly by such Assignee to
the Company without the intervention of the Agent, the Assignor or any other
Bank; and (b) has made and will continue to make, independently and without
reliance upon the Agent, the Assignor or any other Bank, and based on such
documents and information as it has deemed appropriate, its own credit analysis
and decisions relating to the Credit Agreement. The Assignee further
acknowledges and agrees that neither the Agent, nor the Assignor has made any
representations or warranties about the creditworthiness of the Company or any
other party to the Credit Agreement or any other of the Loan Documents, or with
respect to the legality, validity, sufficiency or enforceability of the Credit
Agreement, or any other of the Loan Documents. This assignment shall be made
without recourse to or warranty by the Assignor, except as set forth herein.
Assignee represents and warrants that it is a Person to which
assignments are permitted pursuant to Sections 14.8(c) and (d) of the Credit
Agreement.
Assignor represents and warrants, as of the Effective Date, that it is
the legal and beneficial owner of the interest being assigned and delegated by
it hereunder and that such interest is free and clear of any pledge, encumbrance
or other adverse claim or interest created by Assignor.
Except as otherwise provided in the Credit Agreement, effective as of
the Effective Date:
(a) the Assignee: (i) shall be deemed automatically to have become
a party to the Credit Agreement and the other Loan Documents,
to have assumed all of the Assignor's obligations thereunder
to the extent of the Assignee's percentage referred to in the
second paragraph of this Assignment Agreement, and to have all
the rights and obligations of a party to the Credit Agreement
and the other Loan Documents, as if it were an original
signatory thereto to the extent specified in the second
paragraph hereof; and (ii) agrees to be bound by the terms and
conditions set forth in the Credit Agreement and the other
Loan Documents as if it were an original signatory thereto;
and
(b) the Assignor's obligations under the Credit Agreement and the
other Loan Documents shall be reduced by the Percentage
referred to in the second paragraph of this Assignment
Agreement.
2
117
EXHIBIT 10.1
As used herein, the term "Effective Date" means the date on which all
of the following have occurred or have been completed, as reasonably determined
by the Agent:
(1) the delivery to the Agent of an original of this Assignment
Agreement executed by the Assignor and the Assignee;
(2) the payment to the Agent, of all accrued fees, expenses and
other items for which reimbursement is then owing under the
Credit Agreement;
(3) payment to the Agent of the $3,500 assignment fee referred to
in Section 14.8(d)(iii) of the Credit Agreement;
(4) all other restrictions and items noted in Sections 14.8(c) and
(d) of the Credit Agreement have been completed.
On the Effective Date the Assignee shall pay to the Assignor an amount
equal to the outstanding principal amount of the indebtedness owed to it by the
Company under the Agreement in respect of the interest being assigned hereby.
The Agent shall notify the Assignor and the Assignee, along with
Company, of the Effective Date.
The Assignee hereby advises each of you of the following administrative
details with respect to the assigned loans:
(A) Address for Notices:
Institution Name:
Address:
Attention:
Telephone:
Facsimile:
(B) Payment Instructions:
(C) Proposed effective date of assignment.
The Assignor has delivered to the Agent (or is delivering to Agent
concurrently herewith), the original of each Note held by the Assignor under the
Credit Agreement.
3
118
EXHIBIT 10.1
Please evidence your consent to and acceptance of the proposed
assignment and delegation set forth herein by signing and returning counterparts
hereof to the Assignor and the Assignee.
[ASSIGNOR BANK]
By:
-----------------------------------
Its:
----------------------------------
[ASSIGNEE BANK]
By:
-----------------------------------
Its:
----------------------------------
ACCEPTED AND CONSENTED TO
this____ day of _________
COMERICA BANK, as Agent
By:
-------------------------------
Its:
------------------------------
4
119
EXHIBIT 10.1
EXHIBIT J
GUARANTY
This GUARANTY is made as of the 31st day of July, 1997 by each of the
undersigned guarantors (the "Guarantors"), to Comerica Bank, as Agent ("Agent")
for and on behalf of the Banks (as defined below).
RECITALS
A. Pursuant to that certain Aqua-Chem Revolving Credit and Term Loan
Agreement dated as of July 31, 1997(as amended or otherwise modified from time
to time, the "Credit Agreement") by and among Aqua-Chem, Inc., a Delaware
corporation (the "Company"), Agent and the banks which are named in and
signatories to the Credit Agreement ("Banks"), the Banks have agreed to extend
credit to Company on the terms set forth in the Credit Agreement, with such
credit consisting of (i) the Revolving Credit in an aggregate amount, subject to
the terms of the Credit Agreement, of up to Twenty Million Dollars ($20,00,000)
at any one time outstanding, to be evidenced by the Revolving Credit Note made
or to be made by the Company to the Banks ("Revolving Credit Notes"); (ii) the
Swing Line in an aggregate amount, subject to the terms of the Credit Agreement,
of up to Two Million Five Hundred Thousand Dollars ($2,500,000) at any one time
outstanding, to be evidenced by the Swing Line Note made or to be made by
Company ("Swing Line Note"); (iii) a facility for the issuance of letter(s) of
credit ("Letter(s) of Credit") for the account of the Company, individually, or
jointly and severally with other Account Parties pursuant to Section 3 of the
Credit Agreement, subject to specified availability thereunder; and (iv) the
Term Loan, in an aggregate amount, subject to the terms of the Credit Agreement
of Forty Million Dollars ($40,000,000), to be evidenced by the Term Notes made
by the Company to the Banks (the "Term Notes").
B. As a condition to entering into and performing their respective
obligations under the Credit Agreement, the Banks and the Agent have required
that the Guarantors provide to Agent, for and on behalf of the Banks, among
other guaranties, this Guaranty.
C. Each of the Guarantors desires to see the success of the Company and,
furthermore, shall receive direct and/or indirect benefits from extensions of
credit made or to be made pursuant to the Credit Agreement to the Company.
D. The Agent is acting as Agent for the Banks pursuant to Section 13 of
the Credit Agreement.
NOW, THEREFORE, as a continuing inducement to the Agent and the Banks to
enter into and perform its obligations under the Credit Agreement, each of the
Guarantors has executed and delivered this guaranty ("Guaranty").
120
EXHIBIT 10.1
1. Definitions. Unless otherwise provided herein, all capitalized terms
used in this Guaranty shall have the meanings specified in the Credit Agreement.
The term "Banks" as used herein shall include any successors or permitted
assigns of the Banks, in accordance with the Credit Agreement.
2. Guaranty. Each of the Guarantors hereby guarantees to the Banks the
punctual payment to the Banks when due, whether by acceleration or otherwise, of
all amounts, including, without limitation, principal, interest (including
interest accruing on or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding by such
Guarantor, whether or not a claim for post-filing or post-petition interest is
allowed in such a proceeding), and all other liabilities and obligations, direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred, which may arise under, out of, or in connection with:
(a) any and all Revolving Credit Notes made or to be made to the order
of the Banks (or any of them) by the Company, from time to time pursuant to
the terms and conditions of the Credit Agreement;
(b) the Swing Line Note made or to be made to the order of the Swing
Line Bank by the Company, from time to time pursuant to the terms and
conditions of the Credit Agreement;
(c) any and all Letter of Credit Agreements executed or to be executed
by the Company or the other Account Parties and any of them, from time to
time pursuant to the Credit Agreement, and any Letters of Credit issued or
to be issued thereunder;
(d) any and all Term Notes made or to be made to the order of the
Banks (or any of them) by the Company, from time to time pursuant to the
terms and conditions of the Credit Agreement;
(e) any Interest Rate Protection Agreements;
(f) all other Indebtedness (as defined in the Credit Agreement) of the
Company and/or any Account Party, under or in connection with the Credit
Agreement or the other Loan Documents, whether such Indebtedness is now
existing or hereafter arising; and
(g) all extensions, renewals and amendments of or to the Revolving
Credit Notes, the Swing Line Note and/or the Term Notes (collectively, and
any of such notes, the "Notes"), Letter of Credit Agreements, Letters of
Credit, Interest Rate Protection Agreements, or such other Indebtedness, or
any replacements or substitutions therefor;
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, and reasonable costs and expenses (including without limitation,
all reasonable fees and disbursements
2
121
EXHIBIT 10.1
of counsel to the Agent or any Bank) or otherwise, and hereby agrees that if
Company shall fail to pay any of such amounts when and as the same shall be due
and payable, or shall fail to perform and discharge any covenant, representation
or warranty in accordance with the terms of the Notes, the Credit Agreement, the
Letter of Credit Agreements, the Letters of Credit or any of the other Loan
Documents (subject, in each case, to any applicable periods of grace or cure),
each such Guarantor will forthwith pay to the Agent, on behalf of the Banks, an
amount equal to any such amount or cause Company to perform and discharge any
such covenant, representation or warranty, as the case may be, and will pay any
and all damages that may be incurred or suffered in consequence thereof by Agent
or any of the Banks and all reasonable expenses, including reasonable attorneys'
fees, that may be incurred by Agent in enforcing such covenant, representation
or warranty of Company, and in enforcing the covenants and agreements of this
Guaranty.
3. Unconditional Character of Guaranty. The obligations of each of the
Guarantors under this Guaranty, to the full extent of its guaranty of
Indebtedness hereunder, shall be absolute and unconditional, and shall be a
guaranty of payment and not of collection, irrespective of the validity,
regularity or enforceability of the Notes, the Credit Agreement, the Letter of
Credit Agreements, the Letters of Credit or any of the other Loan Documents, or
any provision thereof, the absence of any action to enforce the same, any waiver
or consent with respect to or any amendment of any provision thereof, the
recovery of any judgment against any Person or action to enforce the same, any
failure or delay in the enforcement of the obligations of Company under the
Notes, the Credit Agreement, the Letter of Credit Agreements, the Letters of
Credit or any of the other Loan Documents, or any setoff, counterclaim,
recoupment, limitation, defense or termination, whether with or without notice
to such Guarantor. Each of the Guarantors hereby waives diligence, demand for
payment, filing of claims with any court, any proceeding to enforce any
provision of the Notes executed by Company, or the Credit Agreement, the Letter
of Credit Agreements, the Letters of Credit or any of the other Loan Documents,
any right to require a proceeding first against Company, or against any other
guarantor or other party providing collateral, or to exhaust any security for
the performance of the obligations of Company, any protest, presentment, notice
or demand whatsoever, and such Guarantor hereby covenants that this Guaranty
shall not be terminated, discharged or released except, subject to Section 6.5
hereof, upon final payment in full (subject to no revocation or rescission) of
all amounts due and to become due from Company or any Account Party, as and to
the extent described above, and only to the extent of any such payment,
performance and discharge. Each of the Guarantors further covenants that no
security now or subsequently held by the Agent or the Banks for the payment of
the Indebtedness evidenced by the Notes made by Company, under the Credit
Agreement, or for the payment of any other Indebtedness of Company, to the Agent
or the Banks under the Credit Agreement, the Letter of Credit Agreements, the
Letters of Credit or the other Loan Documents, whether in the nature of a
security interest, pledge, lien, assignment, setoff, suretyship, guaranty,
indemnity, insurance or otherwise, and no act, omission or other conduct of
Agent or the Banks in respect of such security, shall affect in any manner
whatsoever the unconditional obligation of this Guaranty, and that the Agent and
each of the Banks, in their respective sole discretion and without notice to
Company, may release, exchange, enforce, apply the proceeds of and otherwise
deal with any such security without affecting in any manner the unconditional
obligation of this Guaranty.
3
122
EXHIBIT 10.1
Without limiting the generality of the foregoing, such obligations, and the
rights of the Agent to enforce the same on behalf of the Banks, by proceedings,
whether by action at law, suit in equity or otherwise, shall not be in any way
affected by (i) any insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, dissolution, winding up or other proceeding involving
or affecting Company, or others, or (ii) any change in the ownership of the
capital stock of Company, or any other party providing collateral for any
indebtedness covered by this Guaranty, or any of their respective Affiliates.
Each of the Guarantors hereby waives to the fullest extent possible under
applicable law:
(a) any defense based upon the doctrine of marshaling of assets or
upon an election of remedies by Agent or the Banks, including, without
limitation, an election to proceed by non-judicial rather than judicial
foreclosure;
(b) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal;
(c) any duty on the part of Agent or any of the Banks to disclose to
such Guarantor any facts Agent or the Banks may now or hereafter know about the
Company, regardless of whether Agent or any Bank has reason to believe that any
such facts materially increase the risk beyond that which such Guarantor intends
to assume or has reason to believe that such facts are unknown to such Guarantor
or has a reasonable opportunity to communicate such facts to such Guarantor,
since such Guarantor acknowledges that it is fully responsible for being and
keeping informed of the financial condition of Company and of all circumstances
bearing on the risk of non-payment of any Indebtedness hereby guaranteed;
(d) any claim for reimbursement, contribution, exoneration, indemnity
or subrogation, or any other similar claim, which such Guarantor may have or
obtain against the Company, by reason of the existence of this Guaranty, or by
reason of the payment by such Guarantor of any Indebtedness or the performance
of this Guaranty or of any other Loan Documents, until the Indebtedness has been
repaid and discharged in full and no commitment to extend any credit under the
Credit Agreement or any of the Loan Documents (whether optional or obligatory),
or any Letter of Credit, remains outstanding, and any amounts paid to such
Guarantor on account of any such claim at any time when the obligations of such
Guarantor under this Guaranty shall not have been fully and finally paid shall
be held by such Guarantor in trust for Agent and the Banks, segregated from
other funds of such Guarantor, and forthwith upon receipt by such Guarantor
shall be turned over to Agent in the exact form received by such Guarantor (duly
endorsed to Agent by such Guarantor, if required), to be applied to such
Guarantor's obligations under this Guaranty, whether matured or unmatured, in
such order and manner as Agent may determine; and
(e) any other event or action (excluding compliance by such Guarantor
with the provisions hereof) that would result in the discharge by operation of
law or otherwise of such
4
123
EXHIBIT 10.1
Guarantor from the performance or observance of any obligation, covenant or
agreement contained in this Guaranty.
The Agent and each of the Banks may deal with Company, and any security held
by them for the obligations of Company or any other Account Party (as
aforesaid), in the same manner and as freely as if this Guaranty did not exist
and the Agent shall be entitled, on behalf of Banks, without notice to the
Guarantors, among other things, to grant to the Company, such extension or
extensions of time to perform any act or acts as may seem advisable to such
Agent (on behalf of the Banks) at any time and from time to time, and to permit
the Company or any other Account Party to incur additional indebtedness to
Agent, the Banks, or any of them, without terminating, affecting or impairing
the validity or enforceability of this Guaranty or the obligations of the
Guarantors hereunder.
The Agent may proceed, either in its own name (on behalf of the Banks) or in
the name of any of the Guarantors, or otherwise, to protect and enforce any or
all of its rights under this Guaranty by suit in equity, action at law or by
other appropriate proceedings, or to take any action authorized or permitted
under applicable law, and shall be entitled to require and enforce the
performance of all acts and things required to be performed hereunder by the
Guarantors. Each and every remedy of the Agent and of the Banks shall, to the
extent permitted by law, be cumulative and shall be in addition to any other
remedy given hereunder or now or hereafter existing at law or in equity.
No waiver or release shall be deemed to have been made by the Agent or any
of the Banks of any of its rights hereunder unless the same shall be in writing
and signed by all of the Banks or on behalf of the Banks by the Agent, and any
such waiver shall be a waiver or release only with respect to the specific
matter involved and shall in no way impair the rights of the Agent or any of the
Banks or the obligations of the Guarantors under this Guaranty in any other
respect at any other time.
At the option of the Agent, any of the Guarantors may be joined in any
action or proceeding commenced by the Agent against Company, or any of the other
parties providing collateral for any indebtedness covered by this Guaranty in
connection with or based upon the Notes made by Company, the Credit Agreement,
the Letter of Credit Agreements, the Letters of Credit or any of the other Loan
Documents or other Indebtedness, or any provision thereof, and recovery may be
had against any such Guarantor in such action or proceeding or in any
independent action or proceeding against such Guarantor, without any requirement
that the Agent or the Banks first assert, prosecute or exhaust any remedy or
claim against Company, and/or any of the other parties providing collateral for
any Indebtedness covered by this Guaranty, or any other Indebtedness.
As a separate, additional and continuing obligation, each of the Guarantors
unconditionally and irrevocably undertakes and agrees with Agent that, should
the amounts referred to in Section 2 of this Guaranty not be recoverable from
such Guarantor in its capacity as a guarantor under this Guaranty for any reason
whatsoever (including, without limitation, by reason of any provision of the
Notes, the Credit Agreement, any Letter of Credit Agreement or Letter of Credit,
or any of the other
5
124
EXHIBIT 10.1
Loan Documents being or becoming void, unenforceable, or otherwise invalid under
any applicable law) then, notwithstanding any knowledge thereof by the Agent and
the Banks or any of them at any time, such Guarantor as sole, original and
independent obligor, upon demand by Agent, will make payment to Agent of all
such amounts by way of a full indemnity.
4. Representations and Warranties. Each of the Guarantors (a) ratifies,
confirms and, by reference thereto (as fully as though such matters were
expressly set forth herein), represents and warrants with respect to itself
those matters set forth in Sections 7.1, 7.3, 7.4, 7.5, 7.6, 7.8, 7.9, 7.11,
7.12 through 7.19, inclusive, of the Credit Agreement, and (b) agrees not to
engage in any action or inaction, the result of which would cause a violation of
any term or condition of the Credit Agreement.
5. Collateral for Guaranty. The obligations of the Guarantors under this
Guaranty shall be secured by (i) in the case of each Guarantor which is a
Domestic Subsidiary of the Company, the Security Agreement and, if applicable, a
Pledge Agreement, executed and delivered by each of such Guarantors to Agent,
pursuant to the Credit Agreement, and (iii) in the case of the Guarantor which
is the Parent of the Company, by the Parent Pledge Agreement together with such
other Loan Documents as are required to be executed and delivered by one or more
of the Guarantors concurrently with or subsequent to the date hereof, all
pursuant to the terms and conditions of the Credit Agreement and/or any of the
other Loan Documents.
6. Miscellaneous.
6.1 Governing Law. This Guaranty has been delivered in Michigan and
shall be interpreted and the rights of the parties hereunder shall be determined
under the laws of, and be enforceable in, the State of Michigan (without regard
to its conflict of laws provisions), each of the Guarantors hereby consenting to
the jurisdiction of state and all federal courts sitting in such state.
6.2 Severability. If any term or provision of this Guaranty, or the
application thereof to any circumstance, shall, to any extent, be invalid or
unenforceable, the remainder of this Guaranty, or the application of such term
or provision to circumstances other than those as to which it is held invalid or
unenforceable, as the case may be, shall not be affected thereby, and each term,
provision and obligation of this Guaranty shall be valid and enforceable to the
fullest extent permitted by law.
6.3 Notice. All notices and other communications to be made or given
pursuant to this Guaranty shall be sufficient if made or given in conformity
with Section 14.6 of the Credit Agreement.
6.4 Right of Offset. Each of the Guarantors acknowledges the rights of
the Agent and of each of the Banks, upon the occurrence and during the
continuance of an Event of Default, to offset against the Indebtedness of such
Guarantor to the Banks under this Guaranty, any amount
6
125
EXHIBIT 10.1
owing by the Agent or the Banks, or either or any of them to such Guarantor,
whether represented by any deposit of such Guarantor with the Agent or any of
the Banks or otherwise.
6.5 Release. Upon the satisfaction of the obligations of the
Guarantors hereunder, and when the Guarantors are not subject to any obligation
under the Credit Agreement or any of the other Loan Documents, the Agent shall
deliver to the Guarantors, upon written request therefor, a written release of
this Guaranty; provided however that the effectiveness of this Guaranty shall
continue or be reinstated, as the case may be, in the event that any payment
received or credit given by the Agent or the Banks, or any of them, is returned,
disgorged, rescinded or required to be recontributed to any party as an
avoidable preference, impermissible setoff, fraudulent conveyance, restoration
of capital or otherwise under any applicable state, federal or national law of
any jurisdiction, including without limitation laws pertaining to bankruptcy or
insolvency, and this Guaranty shall thereafter be enforceable against the
Guarantors as if such returned, disgorged, recontributed or rescinded payment or
credit had not been received or given by the Agent or the Banks, and whether or
not the Agent or any Bank relied upon such payment or credit or changed its
position as a consequence thereof.
6.6 Amendments. The terms of this Guaranty may not be waived, altered,
modified, amended, supplemented or terminated in any manner whatsoever except as
provided herein and in accordance with the Credit Agreement. In accordance with
Section 8.20 of the Credit Agreement, all Subsidiaries of the Company created or
otherwise acquired after the Effective Date shall become obligated as Guarantors
hereunder (each as fully as though an original signatory hereto) by executing
and delivering to Agent and the Banks that certain joinder agreement in the form
attached to this Guaranty as Exhibit A.
6.7 Consent to Jurisdiction. Each of the Guarantors and each of the
Agent and the Banks (by accepting the benefits hereof) hereby irrevocably submit
to the non-exclusive jurisdiction of any United States Federal Court or Michigan
state court sitting in Detroit, Michigan in any action or proceeding arising out
of or relating to this Guaranty and each of the Guarantors and the Agent and the
Banks hereby irrevocably agree that claims in respect of such action or
proceeding may be heard and determined in any such United States Federal Court
or Michigan state court. Each of the Guarantors irrevocably consents to the
service of any and all process in any such action or proceeding brought in any
court in or of the State of Michigan by the delivery of copies of such process
to such Guarantor at its address specified on the signature page hereto or by
certified mail directed to such address or such other address as may be
designated by the Guarantor in a notice to the other parties that complies as to
delivery with the terms of Section 6.3. Nothing in this Section shall affect the
right of the Banks and the Agent to serve process in any other manner permitted
by law or limit the right of the Banks or the Agent (or any of them) to bring
any such action or proceeding against any of the Guarantors or any of its or
their property in the courts of any other jurisdiction. Each of the Guarantors
hereby irrevocably waives any objection to the laying of venue of any such suit
or proceeding in the above described courts.
7
126
EXHIBIT 10.1
6.8 Joint and Several Obligation, etc. The obligation of each of the
Guarantors under this Guaranty shall be several and also joint, each with all
and also each with any one or more of the others, and may be enforced against
each severally, any two or more jointly, or some severally and some jointly. Any
one or more of the Guarantors may be released from its obligations hereunder
with or without consideration for such release and the obligations of the other
Guarantors hereunder shall be in no way affected thereby. Agent, on behalf of
Banks, may fail or elect not to prove a claim against any bankrupt or insolvent
Guarantor and thereafter, Agent and the Bank may, without notice to any
Guarantors, extend or renew any part or all of any indebtedness of any of the
Guarantors, and may permit any of the Guarantors to incur additional
indebtedness, without affecting in any manner the unconditional obligation of
the remaining Guarantors. Such action shall not affect any right of contribution
among the Guarantors.
6.9 WAIVER OF JURY TRIAL. THE BANKS (BY ACCEPTING THE BENEFITS
HEREOF), THE AGENT (BY ACCEPTING THE BENEFITS HEREOF) AND EACH OF THE GUARANTORS
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS GUARANTY OR
ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. NEITHER
THE BANKS, THE AGENT, NOR ANY OF THE GUARANTORS SHALL SEEK TO CONSOLIDATE, BY
COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY THE BANKS AND THE AGENT OR THE GUARANTORS EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY ALL OF THEM.
6.10 Limitation under Applicable Insolvency Laws. Notwithstanding
anything to the contrary contained herein, it is the intention of each of the
Guarantors, Agent and the Banks that the amount of each Guarantor's obligations
hereunder shall be in, but not in excess of, the maximum amount thereof not
subject to avoidance or recovery by operation of applicable law governing
bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (collectively, "Applicable Insolvency Laws"). To that end, but only in the
event and to the extent that a Guarantor's obligations hereunder or any payment
made pursuant thereto would, but for the operation of the foregoing proviso, be
subject to avoidance or recovery under Applicable Insolvency Laws, the amount of
such Guarantor's obligations hereunder shall be limited to the largest amount
which, after effect thereto, would not, under Applicable Insolvency Laws, render
such Guarantor's respective obligations hereunder unenforceable or avoidable or
subject to recovery under Applicable Insolvency Laws. To the extent any payment
actually made hereunder exceeds the limitation contained in this Section 6.10,
then the amount of such excess shall, from and after the time of payment by the
8
127
EXHIBIT 10.1
Guarantors (or any of them), be reimbursed by the Banks upon demand by such
Guarantor. The foregoing proviso is intended solely to preserve the rights of
the Agent and the Banks hereunder against the Guarantors to the maximum extent
permitted by Applicable Insolvency Laws and neither Company nor any Guarantor
nor any other Person shall have any right or claim under this Section 6.10 that
would not otherwise be available under Applicable Insolvency Laws. To effectuate
the foregoing, the parties to this Agreement acknowledge and agree that the
provisions of this Section 6.10 only apply to Guarantors which are Domestic
Subsidiaries of the Company.
[signature follows on succeeding page]
9
128
EXHIBIT 10.1
IN WITNESS WHEREOF, the undersigned each of the Guarantors has executed this
Guaranty as of the date first above written.
RUSH CREEK, LLC,
a Wisconsin limited liability company
By:__________________________________
Its:_________________________________
▇▇-▇▇▇▇▇▇ SALES AND SERVICE, INC., A
DELAWARE CORPORATION
By:__________________________________
Its:_________________________________
Signature Page Guaranty
10
129
EXHIBIT 10.1
EXHIBIT A
to Guaranty
JOINDER AGREEMENT
THIS JOINDER AGREEMENT is dated as of ______________, 199_ by
_____________________, a ______________________ corporation ("New Guarantor").
WHEREAS, pursuant to Section 8.20 of that certain Aqua-Chem Revolving Credit
and Term Loan Agreement dated as of July 31, 1997 (as amended or otherwise
modified from time to time, the "Credit Agreement") by and among Aqua-Chem, Inc.
("Company"), the Banks signatory thereto and Comerica Bank, as Agent for the
Banks (in such capacity, "Agent"), and pursuant to Section 6.6 of that certain
Guaranty dated as of July 31, 1997 (as amended or otherwise modified from time
to time the "Guaranty") executed and delivered by the Guarantors named therein
("Guarantors") in favor of Agent, for and on behalf of the Banks, the New
Guarantor must execute and deliver a Joinder Agreement in accordance with the
Credit Agreement and the Guaranty.
NOW THEREFORE, as a further inducement to Banks to continue to provide
credit accommodations to Company and the Account Parties (as defined in the
Credit Agreement), New Guarantor hereby covenants and agrees as follows:
1. All capitalized terms used herein shall have the meanings assigned to
them in the Credit Agreement unless expressly defined to the contrary.
2. New Guarantor hereby enters into this Joinder Agreement in order to
comply with Section 8.20 of the Credit Agreement and Section 6.6 of the
Guaranty and does so in consideration of the Advances made or to be
made from time to time under the Credit Agreement (and the other Loan
Documents, as defined in the Credit Agreement), from which New
Guarantor shall derive direct and indirect benefit as with the other
Guarantors (all as set forth and on the same basis as in the Guaranty).
3. New Guarantor shall be considered, and deemed to be, for all purposes
of the Credit Agreement, the Guaranty and the other Loan Documents, a
Guarantor under the Guaranty as fully as though New Guarantor had
executed and delivered the Guaranty at the time originally executed and
delivered under the Credit Agreement and hereby ratifies and confirms
its obligations under the Guaranty, all in accordance with the terms
thereof.
4. No Default or Event of Default (each such term being defined in the
Credit Agreement) has occurred and is continuing under the Credit
Agreement.
5. This Joinder Agreement shall be governed by the laws of the State of
Michigan and shall be binding upon New Guarantor and its successors and
assigns.
130
EXHIBIT 10.1
IN WITNESS WHEREOF, the undersigned New Guarantor has executed and delivered
this Joinder Agreement as of __________________, 199__.
[NEW GUARANTOR]
By:_____________________________
Its:____________________________
2
131
EXHIBIT 10.1
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Security Agreement") is made as of this 31st day
of July, 1997 by and among Aqua-Chem, Inc., a Delaware corporation (the
"Company"), CB - ▇▇▇▇▇▇ Sales and Service, Inc., a Delaware corporation, and
such other persons or entities which from time to time become parties hereto
(collectively, including the Company, the "Debtors" and individually each a
"Debtor") and Comerica Bank, a Michigan banking corporation, as Agent for and on
behalf of the Banks (as defined below) ("Secured Party").
RECITALS
A. WHEREAS, Pursuant to that certain Aqua-Chem Revolving Credit and Term
Loan Agreement dated as of July 31, 1997 (as amended or otherwise modified from
time to time, the "Credit Agreement"), among the Company, each of the financial
institutions party thereto (collectively, the "Banks") and Secured Party, as
Agent for the Banks, the Banks have agreed, subject to the satisfaction of
certain terms and conditions, to make Advances to Company of the Revolving
Credit, the Swing Line, the Term Loan and to provide for the issuance of Letters
of Credit for the account of Debtor, individually, or jointly and severally with
certain of the other Account Parties (as such terms are defined in the Credit
Agreement), as provided therein; and
B. WHEREAS, each of the Debtors (other than the Company) has executed and
delivered a guaranty (as amended or otherwise modified from time to time, the
"Guaranty") of the obligations of the Company under the Credit Agreement; and
C. WHEREAS, the obligations of the Company under the Credit Agreement and
the obligations of each other Debtor under the Guaranty are to be secured
pursuant to this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
I. Creation of Security Interest
As security for the Indebtedness (hereinafter defined), each Debtor hereby
pledges and grants to Secured Party, as Agent for and on behalf of Banks, a
security interest in the following described property of Debtor (the
"Collateral"):
(a) all inventory, goods (including returned or repossessed goods and
all goods the sale of which gives rise to accounts receivable, contract
rights, chattel paper, general intangibles or instruments), merchandise and
other personal property, in each case whether
132
EXHIBIT 10.1
now owned or hereafter produced, manufactured or acquired by such Debtor
which are held for sale or lease or are furnished or to be furnished under a
contract of service or are raw materials, work in process or materials used
or consumed or to be used or consumed in such Debtor's business;
(b) all accounts; accounts receivable; contract rights; general
intangibles; chattel paper and instruments (including without limitation
instruments evidencing any obligation to such Debtor for payment for goods
sold or leased or services rendered or otherwise); tax refunds; goodwill;
licenses, permits and privileges; customer lists; rights of indemnification;
(c) all machinery, equipment, furniture and other tangible personal
property and fixtures of such Debtor, together with all accessions,
additions, accessories, parts and equipment now or hereafter affixed thereto
or used in connection therewith;
(d) all patents, trademarks and other intellectual property and
proprietary rights, including without limitation those items of property
listed in Schedule 1 hereto;
(e) all Intercompany Notes issued in favor of such Debtor; and
(f) all deposit accounts of such Debtor and all amounts in any lockbox
or in any collateral account, including all funds on deposit therein, all
investments arising out of such funds, all claims thereunder or in
connection therewith, and all cash, instruments, securities, rights and
other property at any time and from time to time received, receivable, or
otherwise distributed in respect of such accounts, such funds or such
investments;
whether any such property is now owned or hereafter acquired or existing by such
Debtor, and all records (including computer software) pertaining to the
foregoing, and all substitutions for, all proceeds and all products of the
foregoing, including insurance proceeds, to the fullest extent permitted by law,
subject in each case only to the Permitted Liens. The pledge and grant of a
security interest in proceeds hereunder shall not be deemed to give such Debtor
any right to dispose of any of the Collateral. Nothing contained herein shall be
deemed to be an assignment of any "intent to use" trademark application.
II. Debtors' Obligations
A. Payment of Secured Indebtedness. The security interest created herein by
each Debtor is given as security for the discharge and performance of the
following obligations: all of such Debtor's obligations contained in or arising
under or in connection with the Credit Agreement, any Note, the Guaranty, any
Interest Rate Protection Agreements, any other Loan Document or any other
document or instrument executed in connection therewith, howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due to become due, together with interest thereon; and
also as security for all other indebtedness and liabilities, whether direct,
indirect, absolute or contingent, owing by such Debtor to the Banks in any
manner and at any
2
133
EXHIBIT 10.1
time pursuant to the Credit Agreement, whether due or hereafter to become due,
now owing or that may hereafter be incurred by such Debtor to or acquired by the
Banks, and any judgments that may hereafter be rendered on such indebtedness or
any part thereof, with interest according to the rates and terms specified, or
as provided by law, and any and all replacements, consolidations, amendments,
renewals or extensions of the foregoing (collectively herein called the
"Indebtedness").
B. Protection of Collateral. Each Debtor shall take any and all reasonable
steps required to protect the Collateral, and in pursuance thereof, each such
Debtor agrees that:
(1) The Collateral will not be misused, wasted or allowed to
deteriorate, except for the ordinary wear and tear of its intended primary use
or to the extent no longer useful or necessary to such Debtor's business, and
will at all times be maintained in accordance with the applicable terms of the
Credit Agreement.
(2) The Collateral described in Section I.(a) will be insured with
insurance coverage by financially sound and reputable insurers and in such forms
and amounts and against such risks as prudent business judgment and then current
practice would dictate for companies or professional enterprises engaged in the
same or a similar business and owning and operating similar properties. In the
case of all such insurance policies, each such Debtor shall designate the
Secured Party, on behalf of Banks, as mortgagee and loss payee and such policies
shall provide that any loss be payable to each such Debtor and Secured Party, on
behalf of Banks, as mortgagee and loss payee, as their respective interests may
appear. Further, upon the request of the Secured Party acting at the request of
the Banks, each such Debtor shall deliver copies of all said policies, including
all endorsements thereon and those required hereunder, to Secured Party; and
each such Debtor assigns to Secured Party, on behalf of Banks, as additional
security hereunder, all its rights to receive proceeds of insurance with respect
to the Collateral. All such insurance shall, by its terms, provide that no
cancellation, lapse (including without limitation any lapse for non-payment of
premiums) or material change in coverage shall become effective until thirty
(30) days after receipt by Secured Party of written notice from the applicable
carrier. Each Debtor further shall provide Secured Party upon request with
evidence reasonably satisfactory to Secured Party that each such Debtor is at
all times in compliance with this paragraph. During the continuance of an Event
of Default, Secured Party may act as each such Debtor's attorney-in-fact in
obtaining, adjusting, settling and compromising such insurance and endorsing any
drafts. Upon default in this covenant, Secured Party may procure such insurance
and its costs therefor shall be charged to Company, payable on demand, with
interest at the highest rate set forth in the Credit Agreement and added to the
Indebtedness secured hereby. The disposition of proceeds of any insurance on the
Collateral ("Insurance Proceeds") shall be governed by the following:
(i) provided that no Event of Default has occurred and is continuing
hereunder, (a) if the amount of Insurance Proceeds in respect of any loss or
casualty does not exceed Five Hundred Thousand Dollars ($500,000), such
Debtor shall be entitled, in the event of such loss or casualty, to receive
all such Insurance Proceeds and to apply the same toward the replacement of
the Collateral affected thereby; and (b) if the amount of Insurance
3
134
EXHIBIT 10.1
Proceeds in respect of any loss or casualty exceeds Five Hundred Thousand
Dollars ($500,000), such Insurance Proceeds shall be paid to and received
by Secured Party, for release to such Debtor for the replacement of the
Collateral affected thereby or, upon written request of such Debtor
(accompanied by reasonable supporting documentation), for such other use or
purpose as approved by the Majority Banks, in their reasonable discretion,
it being understood and agreed in connection with any release of funds
under this subparagraph (B), that the Secured Party and Majority Banks may
impose reasonable and customary conditions on the disbursement of such
Insurance Proceeds; and
(ii) if an Event of Default has occurred or is continuing hereunder,
all Insurance Proceeds in respect of any loss or casualty shall be paid to
and received by the Secured Party, to be applied by the Secured Party
against the Indebtedness and/or to be held by the Secured Party as cash
collateral for the Indebtedness, as the Majority Banks may direct in their
sole discretion.
(3) The Collateral (except inventory currently under lease) is located
in the premises set forth on Schedule II, and will not be moved to premises
other than those set forth on Schedule II, and such other locations with respect
to which each such Debtor shall have executed and delivered to Secured Party all
financing statements and other documents and instruments necessary to perfect or
continue the perfection of the Secured Party's security interest in the
Collateral. Subject to the applicable terms of the Credit Agreement, upon
request therefor by the Secured Party, each such Debtor will inform the Secured
Party in writing of the whereabouts of the Collateral and Debtor will promptly
arrange for any inspections requested by the Secured Party, on behalf of Banks;
(4) Each such Debtor shall comply with all applicable laws, rules,
ordinances, regulations and orders of any governmental authority, whether
federal, state, local or foreign in effect from time to time with respect to the
Collateral, to the full extent required under the Credit Agreement.
(5) Secured Party, on behalf of the Banks, may, subject to the
applicable terms of the Credit Agreement, examine and inspect the Collateral at
any time wherever located.
C. Protection of Security Interest. Each Debtor agrees that:
(1) Except as permitted by the Credit Agreement, it will not sell,
transfer, lease or otherwise dispose of any of the Collateral or any interest
therein or offer to do so (other than the sale or lease of inventory in the
ordinary course of business and the sale or other disposition of worn-out or
other unusable items of tangible personal property or items no longer useful to
or necessary in each such Debtor's business) without the prior written consent
of Secured Party, given at the written direction or with the written approval of
Banks, and will not create, incur, assume or suffer to exist any mortgage,
pledge, encumbrance, security interest, lien or charge of any kind upon any
4
135
EXHIBIT 10.1
of the Collateral (or any interest therein or portion thereof), other than in
favor of Secured Party, on behalf of the Banks and liens permitted under the
Credit Agreement.
(2) It will, to the full extent required under the Credit Agreement,
pay all taxes including, without limitation, any maintenance fees payable on any
registered patents and any fees in connection with any required filings in
connection with any pending or registered trademarks, assessments, governmental
charges and levies upon the Collateral or for its use or operation.
(3) It will sign and execute alone or with Secured Party any financing
statement or other document (including without limitation, filings required in
connection with any pending or registered trademark) or procure any documents
and pay all connected costs, necessary to protect the security interest under
this Security Agreement against the rights or interests of third persons.
(4) It will reimburse Secured Party for all reasonable costs,
including reasonable attorneys' fees, incurred for any action taken by Secured
Party to remedy an Event of Default of Debtor which Secured Party elects to
remedy pursuant to its rights under Paragraph IV hereof.
(5) It will,
(i) subject to Section 8.6 of the Credit Agreement, allow Secured
Party, or any Bank, to examine, audit and inspect such Debtor's books,
accounts, and other records relating to the Collateral wherever located at
all reasonable times during normal business hours, upon oral or written
request of Secured Party, and to make and take away copies of any and all
such books, accounts, records and ledgers;
(ii) punctually and properly perform all of its covenants and
duties under any other security agreement, mortgage, collateral document,
pledge agreement or contract of any kind now or hereafter existing as
security for or in connection with payment of the Indebtedness, or any part
thereof;
(iii) perform its obligations under and comply with the terms and
provisions of the Credit Agreement and the other Loan Documents to which it
is or may become a party;
(iv) keep, at the addresses designated on Schedule II and such
additional addresses as may be provided from time to time for its records,
all records concerning the Collateral, which records will be of such
character as will enable Secured Party or its designees to determine at any
time the status of the Collateral;
(v) give Secured Party not less than 30 days prior written
notice of all contemplated changes in such Debtor's name, legal structure,
or chief executive office, or in the location of the Collateral or such
Debtor's records concerning same and, prior to making any such changes,
file or cause to be filed all financing statements or amendments
5
136
EXHIBIT 10.1
or other documents or instruments determined by Secured Party to be
necessary or appropriate to establish and maintain a valid first priority
security interest in all the Collateral in accordance with the terms hereof;
(vi) promptly furnish Secured Party with any information in
writing which Secured Party may reasonably request concerning the
Collateral;
(vii) to the extent required under the Credit Agreement, promptly
notify Secured Party of any material claim, action or proceeding affecting
the Collateral and title therein, or in any part thereof, or the security
interest created herein, and, at the request of the Secured Party, appear in
and defend, at such Debtor's expense, any such action or proceeding;
(viii) promptly, after being requested by Secured Party, pay to
Secured Party the amount of all reasonable expenses, including reasonable
attorneys' fees and other legal expenses, incurred by Secured Party pursuant
to and in accordance with the Credit Agreement in protecting and maintaining
the Collateral or its rights hereunder, or in connection with any audit or
inspection of the Collateral pursuant to the terms hereof, and in enforcing
the security interest created herein; and
(ix) allow Secured Party, upon and so long as there exists any
Default or Event of Default, to correspond with its account debtors to
confirm its accounts receivable and Obligors under any contracts.
(6) With respect to any Collateral of a kind requiring an additional
security agreement, financing statement, or other writing to perfect a security
interest therein in favor of Secured Party, on behalf of Banks, such Debtor will
forthwith upon demand by Secured Party execute and deliver to Secured Party on
behalf of Banks, whatever documentation the Secured Party or the requisite Banks
shall reasonably deem necessary or proper for such purpose. Should any covenant,
duty or agreement of such Debtor fail to be performed in accordance with its
terms hereunder resulting in an Event of Default, Secured Party may, but shall
never be obligated to, perform or attempt to perform such covenant, duty or
agreement on behalf of such Debtor, and any amount expended by Secured Party in
such performance or attempted performance shall become part of the Indebtedness,
and, at the request of Secured Party, such Debtor agrees to pay such amount to
Secured Party upon demand at Secured Party's office in Detroit, Michigan
together with interest thereon at the highest rate at which interest accrues on
amounts after the same become due pursuant to the terms of the Credit Agreement,
from the date of such expenditure by Secured Party until paid. With respect to
any Collateral (other than goods) in which such Debtor acquires any rights
subsequent to the date hereof and which, under applicable law, a security
interest is or can be perfected by possession, upon request of the Secured Party
or the Majority Banks, such Debtor agrees to deliver possession of such
Collateral to Secured Party immediately upon its acquisition of rights therein.
6
137
EXHIBIT 10.1
(7) It will hold the proceeds of any of the Collateral (including
accounts receivable and contracts) which is sold other than in the ordinary
course of such Debtor's business (or otherwise as permitted under the Credit
Agreement or this Agreement, subject to the terms thereof) in trust for Secured
Party on behalf of the Banks, will not commingle said proceeds with any other
funds, and, after and during the continuance of an Event of Default, will
deliver such proceeds to Secured Party immediately upon its request.
(8) It will not, except as permitted under the Credit Agreement, grant
any rebate, refund, allowance or credit on any account receivable, or on any
amounts due under any accounts receivable, other than in the ordinary course of
business, without Secured Party's prior written consent.
(9) If Secured Party, acting in its sole discretion, redelivers any
Collateral to such Debtor or such Debtor's designee for the purpose of (i) the
ultimate sale or exchange thereof, or (ii)presentation, collection, renewal, or
registration of transfer thereof, or (iii) loading, unloading, storing,
shipping, transshipping, manufacturing, processing or otherwise dealing
therewith preliminary to sale or exchange; such redelivery shall not constitute
a release of Secured Party's security interest therein or in the proceeds
thereof unless Secured Party, with the consent of the Banks, specifically so
agrees in writing. If such Debtor requests any such redelivery, such Debtor will
deliver with such request a duly executed financing statement in form and
substance satisfactory to Secured Party.
(10) Subject to the applicable terms of the Credit Agreement, Debtor
shall take any and all other steps reasonably required under applicable law to
perfect the lien and security interest established hereby in favor of Secured
Party, on behalf of the Banks, including without limitation the execution,
delivery and/or performance of appropriate acknowledgments, governmental
acknowledgments, registrations or approvals, financing statements and other
documents and instruments, and the registration, recording and/or filing of such
instruments with such Persons and in such jurisdictions as necessary to perfect
the security interest and lien established hereby.
III. Default
The terms "Default" and "Event of Default", as used herein, shall mean the
occurrence of a Default or an Event of Default, as the case may be, under the
Credit Agreement.
IV. Secured Party's Rights and Remedies.
In addition to its rights and remedies under the Credit Agreement and the
other Loan Documents, and under applicable law, Secured Party shall have
available to it the following rights and remedies upon occurrence and during the
continuance of an Event of Default:
7
138
EXHIBIT 10.1
A. Right to Discharge Debtor's Obligations. Secured Party may, with the
approval of the Majority Banks, discharge taxes, liens or security interests or
other encumbrances at any time levied or placed on the Collateral in violation
of the terms hereof, whether senior or junior to the security interest herein
granted, may remedy or cure any default of a Debtor under the terms of any
lease, rental agreement, land contract or other document which in any way
pertains to or affects such Debtor's title to or interest in any of the
Collateral, may pay for insurance on the Collateral, and may pay for the
maintenance and preservation of the Collateral, unless such Debtor is contesting
in good faith such obligations, and such Debtor agrees to reimburse Secured
Party, on demand, for any payment made or any expense incurred by Secured Party
pursuant to the foregoing authorization, with interest, which payments and
expenses shall be secured by the Collateral.
B. Remedies and Enforcement. Secured Party shall have and may exercise, at
the direction or with the approval of the Majority Banks, any and all rights of
enforcement and remedies afforded to a secured party under the Uniform
Commercial Code as adopted and in force in the State of Michigan or other
applicable uniform commercial code (or other applicable law), to the full extent
permitted by applicable law, on the date of this Security Agreement or the date
of such Debtor's default, together with any and all other rights and remedies
otherwise provided and available to Secured Party by applicable law unless such
application would result in the invalidity or unenforceability of any provision
hereof, in which case the law of the state in which any of the Collateral is
located shall apply to the extent necessary to render such provision valid and
enforceable; and, in conjunction with, in addition to, or substitution for those
rights, Secured Party may, at the direction or with the approval of the Majority
Banks, or with respect to subparagraph (3) below), all of the Banks:
(1) Enter upon such Debtor's premises to take possession of, assemble,
collect and/or dispose of the Collateral and, if Secured Party elects to do,
to apply any of the Collateral against any of the Indebtedness secured
hereby;
(2) Require such Debtor to assemble the Collateral and make it
available at a place Secured Party designates to allow Secured Party to take
possession or dispose of the Collateral;
(3) Waive any default, or remedy any default, without waiving its
rights and remedies upon default and without waiving any other prior or
subsequent default;
(4) Without any notice to Debtor, notify any parties obligated on any
of the Collateral to make payment to the Secured Party, on behalf of the
Banks, of any amounts due or to become due thereunder and enforce collection
of any of the Collateral by suit or otherwise and surrender, release or
exchange all or any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) the indebtedness
thereunder or evidenced thereby. Upon request of the Secured Party, Debtor
will, at its own expense, notify any parties obligated to Debtor on any of
the Collateral to make payment to the Secured Party of any amounts due or to
become due thereunder, and indicate on all
8
139
EXHIBIT 10.1
▇▇▇▇▇▇▇▇ to such account debtors that their accounts must be paid to or
as directed by Secured Party. Debtor agrees that neither Secured Party
nor the Banks shall be liable for any loss or damage which Debtor
suffers or may suffer as a result of Secured Party's processing of
items or its exercise of any other rights or remedies under this
Security Agreement, including without limitation indirect, special or
consequential damages, loss of revenues or profits, or any claim,
demand or action by any third party not related to or affiliated with
Debtor arising out of or in connection with the processing of items
(excluding only the claims of such third parties in connection with the
processing of items based solely upon the gross negligence or willful
misconduct of Secured Party) or the exercise of any other rights or
remedies hereunder. Debtor further agrees to indemnify and hold Secured
Party and the Banks harmless from and against all such third party
claims, demands or actions, including without limitation litigation
costs and reasonable attorneys' fees, excepting only those claims,
demands and actions arising solely as a result of the gross negligence
or willful misconduct of Secured Party or any of the Banks;
(5) Appoint any officer or agent of Secured Party as Debtor's
true and lawful proxy and attorney-in-fact, with power, upon the
occurrence of any Event of Default (exercisable so long as such Event
of Default is continuing); to endorse such Debtor's name or any of its
officers or agents upon any notes, checks, drafts, money orders, or
other instruments of payment (including payments payable under any
policy of insurance on the Collateral) or Collateral that may come into
possession of the Secured Party in full or part payment of any amounts
owing to the Banks; to sign and endorse the name of such Debtor and/or
any of its officers or agents upon any invoice, freight or express
▇▇▇▇, ▇▇▇▇ of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with
accounts, and any instrument or document relating thereto or to such
Debtor's rights therein; to execute on behalf of such Debtor any
financing statements, amendments, subordinations or other filings
pursuant to the Credit Agreement, this Security Agreement or the other
Loan Documents; such Debtor hereby granting unto Secured Party on
behalf of the Banks, as the proxy and attorney-in-fact of Debtor, full
power to do any and all things necessary to be done in and about the
premises as fully and effectually as Debtor might or could do, and
hereby ratifying all that said proxy and attorney shall lawfully do or
cause to be done by virtue hereof. The proxy and power of attorney
described herein shall be deemed to be coupled with an interest and
shall be irrevocable for the entire term of the Credit Agreement, the
Notes and all transactions thereunder and thereafter as long as any
Indebtedness or any of the commitments to lend (whether optional or
obligatory) remain outstanding. The Secured Party shall have full power
to collect, compromise, endorse, sell or otherwise deal with the
Collateral or proceeds thereof on behalf of the Banks in its own name
or in the name of such Debtor, provided that Secured Party shall act in
a commercially reasonable manner.
9
140
EXHIBIT 10.1
C. Right of Sale.
(1) Each Debtor agrees that upon the occurrence and
continuance of an Event of Default, Secured Party may, at its option,
sell and dispose of the Collateral at public or private sale without
any previous demand of performance. Each Debtor agrees that notice of
such sale sent to such Debtor's address, as set forth on the signature
pages attached hereto, by certified or registered mail sent at least
five (5) Business Days prior to such sale, shall constitute reasonable
notice of sale. The foregoing shall not require notice if none is
necessary under applicable law. The proceeds of sale shall be applied
in the following order:
(i) to all reasonable costs and charges incurred by
Secured Party in the taking and causing the removal and sale
of said property, including such reasonable attorneys' fees as
shall have been incurred by Secured Party;
(ii) to the Indebtedness, including without limitation
all accrued interest thereon, premiums and make whole amounts,
if any, in the order set forth in the Credit Agreement; and
(iii) any surplus of such proceeds remaining shall be
paid to such Debtor, or to such other party who shall lawfully
be entitled thereto.
(2) At any sale or sales made pursuant to this Security
Agreement or in a suit to foreclose the same, the Collateral may be
sold en masse or separately, at the same or at different times, at the
option of the Secured Party or its assigns. Such sale may be public or
private with notice as required by the Uniform Commercial Code as then
in effect in the state in which the Collateral is located, and the
Collateral need not be present at the time or place of sale. At any
such sale, the Secured Party may bid for and purchase any of the
property sold, notwithstanding that such sale is conducted by the
Secured Party or its attorneys, agents, or assigns.
D. Miscellaneous. Secured Party shall have the right at all times to
enforce the provisions of this Security Agreement, on behalf of Banks, in strict
accordance with the terms hereof, notwithstanding any conduct or custom on the
part of Secured Party or any of the Banks in refraining from so doing at any
time or times. The failure of Secured Party or any of the Banks at any time or
times to enforce its rights under said provisions strictly in accordance with
the same shall not be construed as having created a custom in any way or manner
contrary to the specific provisions of this Security Agreement or as having in
any way or manner modified the same. All rights and remedies of Secured Party
and Banks hereunder shall be cumulative and concurrent, and the exercise of one
right or remedy shall not be deemed a waiver or release of any other right or
remedy.
VI. Representations, Warranties and Covenants of Debtors.
10
141
EXHIBIT 10.1
Each Debtor represents and warrants, and, after the date hereof,
covenants so long as any of the Credit Agreement, the Notes or Letter of Credit
Agreements remain in effect, that:
A. Such Debtor's chief executive office and principal place of business
are set forth in Schedule III hereto, and such Debtor has not maintained its
chief executive office and principal place of business at any other location
since March 1, 1997;
B. Each other location where Debtor maintains a place of
business is set forth on Schedule IV;
C. No financing statement covering the Collateral, or any part thereof,
has been or will be filed with any filing officer, except as permitted under the
Credit Agreement.
D. No other agreement, pledge or assignment covering the Collateral, or
any part thereof, has been or will be made and no security interest, other than
the one created hereby or pursuant to security agreements and pledges previously
made in favor of Secured Party on behalf of the Banks, has or will be attached
or has been or will be perfected in the Collateral or in any part thereof,
except as permitted under the Credit Agreement.
E. No material dispute, right of setoff, counterclaim or defenses exist
with respect to any part of the Collateral (excluding accounts, accounts
receivable and rights to payment for services rendered), except as permitted
under the Credit Agreement.
F. At the time Secured Party's security interest attaches to any of the
Collateral or its proceeds, such Debtor will be the lawful owner thereof with
the right to transfer any interest therein (except for such interests which in
the aggregate would not have a Material Adverse Effect), such Collateral is free
and clear of all liens other than the one created hereby or permitted by the
Credit Agreement and that such Debtor will make such further assurances to prove
its title to the Collateral as may be reasonably required, will keep such
Collateral free and clear of all liens other than the one created hereby and
liens permitted by the Credit Agreement, and will take such action to defend the
Collateral and its proceeds against the lawful claims and demands of all persons
whomsoever. The delivery at any time by such Debtor to Secured Party of
Collateral, or financing statements covering any Collateral shall constitute a
representation and warranty by such Debtor under this Security Agreement that,
with respect to such Collateral, and each item thereof, such Debtor is owner of
the Collateral and the matters heretofore warranted in this paragraph are true
and correct in all material respects.
G. The representations and warranties contained in any of the Credit
Agreement and the Guaranty are incorporated by reference herein and are all made
as of the date hereof.
H. It shall, if applicable, contemporaneously with the execution and
delivery of this Agreement, execute and deliver to the Agent an Agreement
(Trademark) in the form of Exhibit A hereto, and shall execute and deliver to
the Agent any other document required to acknowledge or
11
142
EXHIBIT 10.1
register or perfect the Agent's and the Banks' interest in any of the
Collateral described in Section I(d).
VII. Mutual Agreements.
Each Debtor and Secured Party mutually agree as follows:
A. "Debtor" and "Secured Party" as used in this Security
Agreement include the successors and permitted assigns of those parties.
B. To the extent permitted by applicable law, except as otherwise
provided herein, the law governing this Security Agreement shall be that of the
State of Michigan.
C. This Security Agreement includes all amendments and supplements
hereto and all assignments hereof, provided, that such Debtor and Secured Party
shall not be bound by any amendment hereto unless such amendment is expressed in
a writing executed by each of them.
D. All capitalized or other terms not specifically defined herein are
used as defined in the Credit Agreement. To the extent not inconsistent
therewith, all such terms shall also be construed in conformity with the
Michigan or other applicable Uniform Commercial Code.
E. The security interest granted under this Security Agreement shall be
a continuing security interest in every respect (whether or not the outstanding
balance of the Indebtedness is from time to time temporarily reduced to zero)
and Secured Party's security interest in the Collateral as granted herein shall
continue in full force and effect for the entire duration that the Credit
Agreement remains in effect and until all of the Indebtedness is repaid and
discharged in full, and no commitment (whether optional or obligatory) to extend
any credit under the Credit Agreement or any of the Notes remains outstanding.
F. THE PARTIES HERETO ACKNOWLEDGE THAT THIS SECURITY
AGREEMENT IS SUBJECT TO THE MUTUAL WAIVER OF JURY TRIAL
CONTAINED IN THE APPLICABLE PROVISIONS OF THE CREDIT AGREEMENT
AND THE GUARANTY, AS APPLICABLE.
G. Each of the Debtors hereby irrevocably submits to the non-exclusive
jurisdiction of any United States Federal Court or Michigan state court sitting
in Detroit, Michigan in any action or proceeding arising out of or relating to
this Security Agreement and hereby irrevocably agrees that all claims in respect
of such action or proceeding may be heard and determined in any such United
States Federal Court or Michigan state court. Each Debtor irrevocably consents
to the service of any and all process in any such action or proceeding brought
in any court in or of the State of Michigan by the delivery of copies of such
process to such Debtor at its address specified in Schedule II hereto or by
certified mail directed to such address. Nothing in this paragraph shall affect
the right of the Banks and the Secured Party to serve process in any other
manner permitted by law or limit the right
12
143
EXHIBIT 10.1
of the Banks or the Secured Party (or any of them) to bring any such action or
proceeding against any of the Debtors or any of its or their property in the
courts of any other jurisdiction. Each of the Debtors hereby irrevocably waives
any objection to the laying of venue of any such suit or proceeding in the above
described courts.
[SIGNATURES FOLLOW ON SUCCEEDING PAGES]
13
144
EXHIBIT 10.1
IN WITNESS WHEREOF, each of the undersigned Debtors and Secured Party
have executed this Security Agreement as of the day and year first above
written.
DEBTORS:
AQUA-CHEM, INC.
By:__________________________________
Its:__________________________________
CB - ▇▇▇▇▇▇ SALES AND SERVICE,
INC.
By:___________________________________
Its:___________________________________
ACCEPTED BY SECURED PARTY:
COMERICA BANK, as Agent for the Banks
By:______________________________________
Its:______________________________________
Signature Page
Security Agreement
14
145
EXHIBIT 10.1
The undersigned are executing a
counterpart hereof for purposes of
becoming parties hereto:
[FUTURE SUBSIDIARY]
By:__________________________________
Its:__________________________________
15
146
EXHIBIT 10.1
SCHEDULE I
Intellectual Property
ATTACHMENT 1
to
Agreement
(Trademark)
Item A. Trademarks
REGISTERED TRADEMARKS
Country Trademark Registration No.
U.S. AC Stylized Letters 932,238
AC-1 1,083,076
AC-2 1,089,496
AC-240 1,246,171
AC-3 1,092,594
AC-4 1,092,037
AC-5 1,083,075
AC-50 1,224,728
AC-60 1,224,726
AC-7 1,237,931
AC-70 1,246,136
AC-75 1,237,930
AC-8 1,094,147
AC-80 1,246,135
AC-85 1,224,725
AC-90 1,246,137
ACRO-PAC 1,261,625
AMERICAN BOILER &
CONTROL COMPANY 1,239,852
AQUA-CHEM 1,307,927
AQUA-CHEM 766,376
BOILERMATE 708,411
TOTAL PROTECTION PLAN
CB and Design 1,690,519
CB 987,858
▇▇-▇▇▇▇ 1,717,786
16
147
EXHIBIT 10.1
▇▇-▇▇▇▇ and Design 1,715,306
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ HIGH
EFFICIENCY EXL 1,673,210
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and Design 1,418,155
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and Design 1,415,740
▇▇▇▇▇▇▇-▇▇▇▇▇▇
Stylized Letters 575,242
MONITOR 697,452
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and Design 659,832
DATA 1 1,352,559
"EU" and Design 1,947,815
Design Only 1,416,407
HEV-E-DUTY 721,008
HEV-E-OIL 512,817
HIGHLANDER 763,507
IBC and Design 1,229,404
IBC and Design 1,229,405
IC and Design 1,529,586
PARACOIL
Stylized Letters 780,316
PEAK TEMP and Design 781,399
PROGRESS 655,506
SPRAY-FILM 822,373
SPRAYMASTER 892,464
SYNCHROFIRE 1,365,446
PENDING TRADEMARK APPLICATIONS
Country Trademark Serial No.
U.S. ORBIS 75/256,114
EXPIRED, ABANDONED OR CANCELLED TRADEMARKS
Country Trademark Registration No./Serial No.
U.S. SENS-OR-TRIM 1,125,158
AQUA-CHEM 963,945
17
148
EXHIBIT 10.1
Flame in Hand
Circle Logo 588,997
EU W/Global Design 74/291,027
PERFORMER SERIES 74/442,454
WATER-PRO 1,370,006
TRADEMARK APPLICATIONS IN PREPARATION
Country Trademark Products/Services
U.S. CENTRE FIRE
EFD
EFE
ENHANCED FILM
Item B. Trademark Licenses
None
18
149
EXHIBIT 10.1
Attachment 1
to Agreement (Patent)
Patents (including letters patent and applications for letters patent):
Country Patent Patent No. Issue Date
------- ------ ---------- ----------
U.S. Integrated 5,335,628 8/9/94
boiler/fuel
cell system
U.S. Membrane 5,348,651 9/20/94
simulator
U.S. Multiple- 5,522,696 6/4/96
shutter
throttle
characterizati
on assembly
for burners
U.S. Scale 4,713,195 12/15/87
inhibitor
U.S. Fine Gas 4,559,305 04/21/87
recirculation
system for
fire tube
boilers and
burner
U.S. Air atomizing 5,344,311 9/6/94
system for oil
burners
Patent licenses:
19
150
EXHIBIT 10.1
License between Y.T. Li Engineering, Inc. and Aqua-Chem, Inc. dated
July 27, 1995
Country Patent Patent No. Issue Date
------- ------ ---------- ----------
U.S. Distillation 4,441,963 4/10/84
apparatus
U.S. Wobble tube 4,618,399 10/21/86
evaporator
U.S. Orbital drive 4,762,592 8/9/88
evaporator
U.S. Orbital tube 5,221,439 6/22/93
evaporator
U.S. Orbital type 5,363,660 11/15/94
freezing
apparatus and
method
U.S. Heat transfer 5,385,645 1/31/95
apparatus
U.S. Apparatus 08/571,906 12/19/95
Process and (pending) (Filing Date)
System for
Tube and Whip
Rod Heat
Exchanger
U.S. Orbital type 5,363,660 11/15/94
freezing
apparatus and
method
U.S. Enhanced Film 60/046,917 05/16/97
Resalination (pending) (Filing Date)
Apparatus and
Process
U.S. Distillation 4,230,529 10/28/80
Apparatus
20
151
EXHIBIT 10.1
U.S. Orbital/ 07/388,248
Oscillation
Filtration
System with no
Rotary Seal
U.S. Chromato- 5,013,446 5/7/91
graphic Gel
Contactor and
Process
21
152
EXHIBIT 10.1
Schedule II
Location of Collateral
22
153
EXHIBIT 10.1
Schedule III
Each Debtor's chief executive office
and principal place of business
23
154
EXHIBIT 10.1
Schedule IV
Locations of Place of Business
24
155
EXHIBIT 10.1
to Security Agreement
AGREEMENT
(Trademark)
THIS AGREEMENT (TRADEMARK) (this "Agreement"), dated as of July 31,
1997, among Aqua-Chem, Inc., also known as Aqua Chem, Inc., also known as
Aqua-Chem, also known as Aqua-Chem Incorporated, formerly known as Aqua-Chem
Holding, Inc., also known as Aqua Chem Holding, Inc. ("Company" and sometimes a
"Debtor"), and Comerica Bank in its capacity as agent for the Banks referred to
below.
WITNESSETH
D. WHEREAS, pursuant to that certain Aqua-Chem Revolving Credit and
Term Loan Agreement dated as of July 31, 1997 (as amended or otherwise modified
from time to time, the "Credit Agreement"), among the Company, each of the
financial institutions party thereto (collectively, the "Banks") and Secured
Party, as Agent for the Banks, the Banks have agreed, subject to the
satisfaction of certain terms and conditions, to make Advances to Company and to
provide for the issuance of Letters of Credit for the account of Company,
individually, or jointly and severally with certain of the other Account Parties
(as such terms are defined in the Credit Agreement), as provided therein; and
E. WHEREAS, in connection with the Credit Agreement, the Debtors have
executed and delivered a Security Agreement, dated as of the date hereof (as
amended or otherwise modified from time to time, the "Security Agreement"); and
F. WHEREAS, as a condition precedent to the making of the initial
Advances under the Credit Agreement, the Debtors are required to execute and
deliver this Agreement and to further confirm the grant to the Secured Party for
the benefit of the Banks a continuing security interest in all of the Trademark
Collateral (as defined below) to secure all Indebtedness.
NOW, THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, and in order to induce the Banks to make Advances
(including the initial Advance) to the Company pursuant to the Credit Agreement,
each of the Debtors agrees, for the benefit of the Banks, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Indebtedness, each of the Debtors does hereby mortgage, pledge
and hypothecate to the Secured Party for the benefit of the Banks, and
156
EXHIBIT 10.1
grant to the Secured Party for the benefit of the Banks a security interest in,
all of the following property (the "Trademark Collateral"), whether now owned or
hereafter acquired or existing:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos, other source of business
identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of a like nature
(all of the foregoing items in this clause (a) being collectively
called a "Trademark") now existing anywhere in the world or hereafter
adopted or acquired, whether currently in use or not, all registrations
and recordings thereof and all applications in connection therewith,
whether pending or in preparation for filing, including registrations,
recordings and applications in the United States Patent and Trademark
Office or in any office or agency of the United States of America or
any State thereof or any foreign country, including those referred to
in Item A of Attachment 1 hereto;
(b) all Trademark licenses, including each Trademark license
referred to in Item B of Attachment 1 hereto;
(c) all renewals of any of the items described in clauses (a)
and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by the Debtors against third parties for past,
present, or future infringement or dilution of any Trademark, Trademark
registration, or Trademark license, including any Trademark, Trademark
registration or Trademark license referred to in Item A and Item B of
Attachment 1 hereto, or for any injury to the goodwill associated with
the use of any Trademark or for breach or enforcement of any Trademark
license. Nothing contained herein shall be deemed to be an assignment
of any "intent to use" trademark application.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Debtors for the purpose of registering the security interest of
the Secured Party and the Banks in the Trademark Collateral with the United
States Patent and Trademark Office and corresponding offices in other countries
of the world. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Secured Party and the Banks under the Security Agreement. The Security Agreement
(and all rights and remedies of the Secured Party and the Banks thereunder shall
remain in full force and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full of all
Indebtedness and commitment (whether optional or obligatory) to extend any
credit under the Credit Agreement has been terminated, the Secured Party shall,
at the Debtors' expense, execute and deliver to the Debtors
2
157
EXHIBIT 10.1
all instruments and other documents as may be necessary or proper to release the
lien on and security interest in the Trademark Collateral which has been granted
hereunder.
SECTION 5. Acknowledgment. Each of the Debtors does hereby further
acknowledge and affirm that the rights and remedies of the Secured Party for the
benefit of the Banks with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which (including the remedies provided for therein)
are incorporated by reference herein as if fully set forth herein.
SECTION 6. Loan Documents, etc. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
3
158
EXHIBIT 10.1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
DEBTORS:
AQUA-CHEM, INC.
By:_________________________________________
Its:________________________________________
Address: ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: _________________________________
Facsimile No.: _____________________________
COMERICA BANK, as Agent for the Banks
By:_________________________________________
Title:______________________________________
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:__________________________________
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page
Trademark Agreement
4
159
EXHIBIT 10.1
ATTACHMENT 1
to
Agreement
(Trademark)
Item A. Trademarks
REGISTERED TRADEMARKS
Country Trademark Registration No.
------- --------- ----------------
U.S. AC Stylized Letters 932,238
AC-1 1,083,076
AC-2 1,089,496
AC-240 1,246,171
AC-3 1,092,594
AC-4 1,092,037
AC-5 1,083,075
AC-50 1,224,728
AC-60 1,224,726
AC-7 1,237,931
AC-70 1,246,136
AC-75 1,237,930
AC-8 1,094,147
AC-80 1,246,135
AC-85 1,224,725
AC-90 1,246,137
ACRO-PAC 1,261,625
AMERICAN BOILER &
CONTROL COMPANY 1,239,852
AQUA-CHEM 1,307,927
AQUA-CHEM 766,376
BOILERMATE 708,411
TOTAL PROTECTION PLAN
CB and Design 1,690,519
CB 987,858
▇▇-▇▇▇▇ 1,717,786
▇▇-▇▇▇▇ and Design 1,715,306
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ HIGH
EFFICIENCY EXL 1,673,210
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and Design 1,418,155
160
EXHIBIT 10.1
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and Design 1,415,740
▇▇▇▇▇▇▇-▇▇▇▇▇▇
Stylized Letters 575,242
MONITOR 697,452
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and Design 659,832
DATA 1 1,352,559
"EU" and Design 1,947,815
Design Only 1,416,407
HEV-E-DUTY 721,008
HEV-E-OIL 512,817
HIGHLANDER 763,507
IBC and Design 1,229,404
IBC and Design 1,229,405
IC and Design 1,529,586
PARACOIL
Stylized Letters 780,316
PEAK TEMP and Design 781,399
PROGRESS 655,506
SPRAY-FILM 822,373
SPRAYMASTER 892,464
SYNCHROFIRE 1,365,446
WATER-PRO 1,370,006
PENDING TRADEMARK APPLICATIONS
Country Trademark Serial No.
------- --------- ----------
U.S. ORBIS 75/256,114
EXPIRED, ABANDONED OR CANCELLED TRADEMARKS
Country Trademark Registration No./Serial No.
------- --------- ---------------------------
U.S. SENS-OR-TRIM 1,125,158
AQUA-CHEM 963,945
Flame in Hand
Circle Logo 588,997
EU W/Global Design 74/291,027
PERFORMER SERIES 74/442,454
WATER-PRO 1,370,006
2
161
EXHIBIT 10.1
TRADEMARK APPLICATIONS IN PREPARATION
Country Trademark Products/Services
------- --------- -----------------
U.S. CENTRE FIRE
EFD
EFE
ENHANCED FILM
Item B. Trademark Licenses
None
3
162
EXHIBIT 10.1
to Security Agreement
AGREEMENT
(Patent)
THIS AGREEMENT (PATENT) (this "Agreement"), dated as of July 31, 1997,
among Aqua-Chem, Inc. ("Company" and sometimes a "Debtor"), and Comerica Bank in
its capacity as agent for the Banks referred to below.
WITNESSETH
G. WHEREAS, pursuant to that certain Aqua-Chem Revolving Credit and
Term Loan Agreement dated as of July 31, 1997 (as amended or otherwise modified
from time to time, the "Credit Agreement"), among the Company, each of the
financial institutions party thereto (collectively, the "Banks") and Secured
Party, as Agent for the Banks, the Banks have agreed, subject to the
satisfaction of certain terms and conditions, to make Advances to Company and to
provide for the issuance of Letters of Credit for the account of Company,
individually, or jointly and severally with certain of the other Account Parties
(as such terms are defined in the Credit Agreement), as provided therein; and
H. WHEREAS, in connection with the Credit Agreement, the Debtors have
executed and delivered a Security Agreement, dated as of the date hereof (as
amended or otherwise modified from time to time, the "Security Agreement"); and
I. WHEREAS, as a condition precedent to the making of the initial
Advances under the Credit Agreement, the Debtors are required to execute and
deliver this Agreement and to further confirm the grant to the Secured Party for
the benefit of the Banks a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Indebtedness.
NOW, THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, and in order to induce the Banks to make Advances
(including the initial Advance) to the Company pursuant to the Credit Agreement,
each of the Debtors agrees, for the benefit of the Banks, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Indebtedness, each of the Debtors does hereby mortgage, pledge
and hypothecate to the Secured Party for the benefit of the Banks, and grant to
the Secured Party for the benefit of the Banks a security interest in, all of
the following property (the "Patent Collateral"), whether now owned or hereafter
acquired or existing:
163
EXHIBIT 10.1
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing anywhere in the world and including each patent and patent
application referred to in Item A of Attachment 1 hereto;
(b) all patent licenses, including each patent license referred
to in Item B of Attachment 1 hereto;
(c) all reissues, divisions, continuations, continuations-in-
part, extensions, renewals and reexaminations of any of the items
described in the foregoing clauses (a) and (b); and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceed of infringement suits), the
right to ▇▇▇ third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in Item A of Attachment 1 hereto, and for
breach or enforcement of any patent license, including any patent
license referred to in Item B of Attachment 1 hereto, and all rights
corresponding thereto throughout the world.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Debtors for the purpose of registering the security interest of
the Secured Party and the Banks in the Patent Collateral with the United States
Patent and Trademark Office and corresponding offices in other countries of the
world. The security interest granted hereby has been granted as a supplement to,
and not in limitation of, the security interest granted to the Secured Party and
the Banks under the Security Agreement. The Security Agreement (and all rights
and remedies of the Secured Party and the Banks thereunder) shall remain in full
force and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full of all
Indebtedness and commitment (whether optional or obligatory) to extend any
credit under the Credit Agreement has been terminated, the Secured Party shall,
at the Debtors' expense, execute and deliver to the Debtors all instruments and
other documents as may be necessary or proper to release the lien on and
security interest in the Patent Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. Each of the Debtors does hereby further
acknowledge and affirm that the rights and remedies of the Secured Party for the
benefit of the Banks with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which (including the remedies provided for therein)
are incorporated by reference herein as if fully set forth herein.
SECTION 6. Loan Documents, etc. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.
2
164
EXHIBIT 10.1
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
DEBTORS:
AQUA-CHEM, INC.
By:_________________________________________
Its:________________________________________
Address: ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: _________________________________
Facsimile No.: _____________________________
COMERICA BANK, as Agent for the Banks
By:__________________________________________
Title:_______________________________________
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:___________________________________
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page
Patent Agreement
3
165
EXHIBIT 10.1
Attachment 1
to Agreement (Patent)
Patents (including letters patent and applications for letters patent):
Country Patent Patent No. Issue Date
------- ------ ---------- ----------
U.S. Integrated boiler/fuel 5,335,628 8/9/94
cell system
U.S. Membrane simulator 5,348,651 9/20/94
U.S. Multiple-shutter 5,522,696 6/4/96
throttle
characterization
assembly for burners
U.S. Scale inhibitor 4,713,195 12/15/87
U.S. Flue Gas 4,559,305 04/21/87
recirculation system
for fire tube boilers
and burner
U.S. Air atomizing 5,344,311 9/6/94
system for oil
burners
4
166
EXHIBIT 10.1
Patent licenses:
License between Y.T. Li Engineering, Inc. and Aqua-Chem, Inc. dated July 27,
1995
Country Patent Patent No. Issue Date
------- ------ ---------- ----------
U.S. Distillation apparatus 4,441,963 4/10/84
U.S. Wobble tube 4,618,399 10/21/86
evaporator
U.S. Orbital drive 4,762,592 8/9/88
evaporator
U.S. Orbital tube 5,221,439 6/22/93
evaporator
U.S. Orbital type freezing 5,363,660 11/15/94
apparatus and
method
U.S. Heat transfer 5,385,645 1/31/95
apparatus
U.S. Apparatus, Process 08/571,906 12/19/95
and System for Tube (pending) (Filing Date)
and Whip Rod Heat
Exchanger
U.S. Orbital type freezing 5,363,660 11/15/94
apparatus and
method
U.S. Distillation 4,230,529 10/28/80
Apparatus
U.S. Enhanced Film 60/046,917 05/16/97
Desalination (pending) (Filing Date)
Apparatus and
Process
U.S. Orbital/Oscillation 07/338,248 8/1/89
Filtration System (Filing Date)
with no Rotary Seal
U.S. Chromatographic 5,013,446 5/7/91
Gel Contactor and
Process
5
167
EXHIBIT 10.1
EXHIBIT L
FORM OF TERM LOAN RATE REQUEST
No._____________________ Dated:__________________
To: Comerica Bank - Agent
Re: Aqua-Chem Revolving Credit and Term Loan Agreement dated as of July 31,
1997 (as amended or otherwise modified from time to time, the
"Agreement") by and among the lenders from time to time parties thereto
(collectively, the "Banks"), Comerica Bank, as Agent for the Banks (the
"Agent"), and Aqua-Chem, Inc. (the "Company")
Pursuant to the Agreement, the Company hereby requests that the Banks
refund or convert, as applicable, an Advance from Banks as follows:
A. Date of Refunding or Conversion of Advance:___________________
B. Amount of Advance:
$_________________
C. Type of Activity:
1. Refunding [ ]
2. Conversion [ ]
D. Interest Rate:
1. Prime-based Rate [ ]
2. Eurocurrency-based Rate [ ]
E. Interest Period (for Eurocurrency-based Advances only):
168
EXHIBIT 10.1
1. One (1) Month [ ](1)
2. Two (2) Months [ ]
3. Three (3) Months [ ]
4. Six (6) Months [ ]
---------------
AQUA-CHEM, INC.
By:_____________________________
Its:_____________________________
1Until January 31, 1998 only One (1) Month Interest Period available except
as otherwise permitted by Agent.
2
169
EXHIBIT 10.1
EXHIBIT M-1
COMPANY PLEDGE AGREEMENT
(Aqua-Chem, Inc.)
THIS STOCK PLEDGE ("Stock Pledge") made as of this 31st day of July, 1997 by
and between Aqua-Chem, Inc., a Delaware corporation ("Company") and Comerica
Bank, a Michigan banking corporation, as Agent for and on behalf of the Banks
(as defined below) ("Secured Party").
RECITALS:
A. Pursuant to that certain Aqua-Chem Revolving Credit and Term Loan
Agreement dated as of July 31, 1997(as may be amended, or otherwise modified
from time to time, the "Credit Agreement") by and among Company, Secured Party
as Agent and the financial institutions which are named in and are signatories
to the Credit Agreement ("Banks"), the Banks have agreed to extend credit to
Company on the terms set forth in the Credit Agreement.
B. As a condition to the performance of their respective obligations
under the Credit Agreement, the Banks, and Secured Party, as Agent for the
Banks, have required that Company provide this Stock Pledge to Secured Party,
as Agent for the Banks, granting various security interests, liens and other
encumbrances as security for the Company's obligations under its Notes, the
Credit Agreement and the other Loan Documents.
C. Agent is acting as Agent for the Banks pursuant to Section 13.1 of
the Credit Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
I. Creation of Security Interest
Company hereby grants to Secured Party, on behalf of Banks and the
Agent, a security interest in the property described in paragraph II, below
("Collateral").
II. Collateral.
The Collateral consists of the following:
(a) 100% of the outstanding shares of each class of stock, (or other
ownership interest) of each Domestic Subsidiary listed on Schedule A-1 hereto
(as such Schedule may be revised
170
EXHIBIT 10.1
pursuant to Section III B.1 hereof) and 65% of the outstanding shares of each
class of stock (or other ownership interest) of each Foreign Subsidiary listed
on Schedule A-2 (as such Schedule may be revised pursuant to Section III B.1
hereof) hereto, together with all of the certificates and/or instruments
representing such shares of stock (or other ownership interest), and all cash,
securities, dividends, rights and other property at any time and from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares;
(b) 100% of any additional shares of stock, (or other ownership interest)
of any of the Domestic Subsidiaries listed on Schedule A-1 hereto and 65% of any
additional shares of stock, (or other ownership interest) of any of the Foreign
Subsidiaries listed on Schedule A-2 hereto, at any time and from time to time
acquired by the Company in any manner, all of the cash, securities, dividends,
rights and other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
shares;
(c) All other property hereafter delivered to the Agent in substitution
for or in addition to the foregoing, all certificates and instruments
representing or evidencing such property, and all cash, securities, interest,
dividends, rights and other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
thereof; and
(d) All products and proceeds of all of the foregoing.
III. Company's Obligations
A. Payment of Secured Indebtedness. The security interest created herein
is given as security for:
(1) All of Company's obligations contained in or arising under or in
connection with the Credit Agreement and the Notes issued by it from time to
time pursuant to the Credit Agreement, and all obligations of Company contained
in or arising under the other Loan Documents executed by Company;
(2) All of Company's obligations contained in or arising under any and
all Letter of Credit Agreements executed or to be executed by Company from time
to time pursuant to the Credit Agreement, and any Letters of Credit issued or to
be issued thereunder;
(3) All of Company's obligations contained in or arising under any
Interest Rate Protection Agreements;
(4) The obligations of Company for payment of all sums hereafter
loaned, paid out, expended or advanced by or for the account of the Banks (or
any of them) or by the Secured Party under the terms of this Stock Pledge, the
Credit Agreement, or the other Loan Documents, in connection with the Collateral
or any of the documents or instruments described in this Stock Pledge, the
Credit Agreement or the other Loan Documents;
2
171
EXHIBIT 10.1
together with interest thereon as provided for herein or therein; and
also as security for all other indebtedness and liabilities, whether direct,
indirect, absolute or contingent, owing by the Company to the Banks in any
manner under the Credit Agreement or the Loan Documents, which hereafter become
due, or that may hereafter be incurred by the Company to or acquired (pursuant
to the Credit Agreement or the other Loan Documents) by the Banks, and all other
future obligations of the Company to the Banks, their successors and assigns,
howsoever created, arising or evidenced, whether joint or several, direct or
indirect, absolute or contingent, primary or secondary, and any judgments that
may hereafter be rendered on such indebtedness or any part thereof, with
interest according to the rates and terms specified, or as provided by law, and
any and all replacements, consolidations, amendments, renewals or extensions of
the foregoing (collectively herein called the "Indebtedness").
B. Protection of Security Interest.
(1) Company shall take any and all steps required to protect the
Collateral, and in pursuance thereof Company agrees that Company shall deliver
or caused to be delivered to Secured Party and Secured Party shall receive
possession, on behalf of Banks, of certificates representing all of the pledged
shares referred to in Schedule A-1 or A-2, as the case may be, properly endorsed
or with assignments separate from such certificates in blank for transfer. In
addition Secured Party shall receive proof that appropriate acknowledgments,
governmental approvals, share register entries, local pledge agreements,
financing statements, collateral and other documents covering the Collateral
have been executed and delivered by the appropriate parties and recorded on file
with such Persons and in such jurisdictions as necessary to perfect the security
interests, or other liens granted hereby and/or thereby. The Secured Party from
time to time shall revise Schedule A-1 and Schedule A-2 hereto and promptly
deliver a copy thereto to Company and the Banks, on the effective date of the
acquisition or creation by Company of a Domestic Subsidiary or a direct Foreign
Subsidiary (as the case may be), adding to Schedule A-1 the name of each such
Domestic Subsidiary or to Schedule A-2 each such direct Foreign Subsidiary (as
the use may be) so acquired or created, and upon such revision, Company shall be
deemed to have pledged 100% of the capital stock (or other ownership interests)
of each such Domestic Subsidiary and 65% of the capital stock (or other
ownership interests) of each such Foreign Subsidiary so acquired or created to
Secured Party for and on behalf of Banks.
(2) It will not sell, transfer, assign or otherwise dispose of any of
the Collateral or any interest therein or offer to do so without the prior
written consent of Secured Party, given at the direction of the Majority Banks,
or permit anything to be done that may materially impair the value of any of the
Collateral or the security intended to be afforded by this Stock Pledge.
(3) It will, subject to the applicable terms of the Credit Agreement,
pay all taxes and assessments upon the Collateral or for its use or operation
before any interest or penalty for nonpayment attaches thereto unless said
payment is being contested in good faith and it establishes a reserve as
required by generally accepted accounting principles.
3
172
EXHIBIT 10.1
(4) It will, subject to the applicable terms of the Credit Agreement,
sign and execute alone or with Secured Party any financing statement or other
document or procure any documents and pay all reasonable connected costs,
necessary to protect the security interest under this Stock Pledge against the
rights or interests of third persons.
(5) It will, subject to the applicable terms of the Credit Agreement,
reimburse Secured Party for all reasonable costs, including reasonable
attorneys' fees, incurred for any action taken by Secured Party to remedy an
Event of Default which Secured Party elects to remedy pursuant to its rights
under Article VI hereof.
(6) It will:
(i) subject to the applicable terms of the Credit Agreement,
allow Secured Party to examine, audit and inspect Company's books, accounts,
records (including without limitation all records relating to the Collateral
or the Indebtedness), ledgers and assets and properties of every kind and
description wherever located at all reasonable times during normal business
hours, upon oral or written request of Secured Party, and to make and take
away copies of any and all such books, accounts, records and ledgers. An
examination of the records or properties of the Company may require
revealment of proprietary and/or confidential data and information, and the
provisions of Section 14.12 of the Credit Agreement are incorporated herein;
(ii) punctually and properly perform all of its covenants and
duties under any other security agreement, mortgage, collateral pledge
agreement or contract of any kind now or hereafter existing as security for
or in connection with payment of the Indebtedness, or any part thereof;
(iii) perform its obligations under the Loan Documents;
(iv) promptly furnish Secured Party with any information in
writing which Secured Party may reasonably request concerning the
Collateral;
(v) promptly notify Secured Party of any material change in any
fact or circumstances warranted or represented by Company in this Stock
Pledge or in any other writing furnished by Company to Secured Party in
connection with the Collateral or the Indebtedness;
(vi) promptly notify Secured Party of any material claim, action
or proceeding affecting the Collateral and title therein, or in any part
thereof, or the security interest created herein, and, at the request of the
Secured Party, appear in and defend, at Company's expense, any such action
or proceeding; and
4
173
EXHIBIT 10.1
(vii) promptly, after being requested by Secured Party, pay to
Secured Party the amount of all reasonable expenses, including reasonable
attorneys' fees and other legal expenses, incurred by Secured Party in
protecting and maintaining the Collateral or its rights hereunder, or in
connection with any audit or inspection of the Collateral pursuant to the
terms hereof, and in enforcing the security interest created herein.
(7) With respect to any Collateral of a kind requiring an additional
security agreement, financing statement, or other writing to perfect a security
interest therein in favor of Secured Party, on behalf of Banks, Company will
forthwith execute and deliver to Secured Party on behalf of Banks, whatever the
Secured Party or the Majority Banks shall deem necessary or proper for such
purpose. Should any covenant, duty or agreement of Company fail to be performed
in accordance with its terms hereunder, Secured Party may, but shall never be
obligated to, perform or attempt to perform such covenant, duty or agreement on
behalf of Company, and any amount expended by Secured Party in such performance
or attempted performance shall become part of the Indebtedness, and, at the
request of Secured Party, Company agrees to pay such amount to Secured Party
upon demand at Secured Party's office in Detroit, Michigan together with
interest thereon at the highest rate which interest accrues on amounts after the
same become due pursuant to the terms of any note executed pursuant to the
Credit Agreement from the date of such expenditure by Secured Party until paid.
With respect to any Collateral in which Company acquires any rights subsequent
to the date hereof and which, under applicable law, a security interest is or
can be perfected by possession, Company agrees to deliver possession of such
Collateral to Secured Party immediately upon its acquisition of rights therein.
(8) Company will hold the proceeds of any of the Collateral in trust
for Secured Party on behalf of the Banks, will not commingle said proceeds with
any other funds, and, after an Event of Default, will deliver such proceeds to
Secured Party at its request.
(9) If Secured Party, acting in its sole discretion, redelivers any
Collateral to Company or Company's designee for the purpose of
(i) the ultimate sale or exchange thereof, or
(ii) presentation, collection, renewal, or registration of transfer
thereof,
such redelivery shall not constitute a release of Secured Party's security
interest therein or in the proceeds thereof unless Secured Party, with the
consent of the Majority Banks, specifically so agrees in writing.
(10) If Company requests any such redelivery, Company will deliver with
such request a duly executed financing statement in form and substance
satisfactory to Secured Party.
5
174
EXHIBIT 10.1
IV. Default
The term "Event of Default", as used herein, means the occurrence of any
Event of Default under the Credit Agreement.
V. Consequence of Default.
Upon an Event of Default, Secured Party shall be entitled, subject to
applicable law, to all of its remedies specified herein, in the Credit
Agreement, or in any other document executed in connection with the Credit
Agreement or this Stock Pledge, or provided by law. Additionally, upon an Event
of Default and subject to applicable law, Secured Party will be entitled to
receive all dividends payable in respect of the pledged shares evidencing the
Collateral pledged under this Stock Pledge, and may change the registration of
any registerable Collateral to any other name or form and is hereby authorized
to appoint any officer or agent of Secured Party as Company's true and lawful
proxy and attorney-in-fact, with power, upon the occurrence of any Event of
Default (exercisable so long as such Event of Default is continuing), to
exercise all voting rights in respect of the shares evidencing the Collateral
pledged hereby; to endorse Company's name or any of its officers' names or
agents' names upon any notes, checks, drafts, money orders, or other instruments
of payment (including payments payable under any policy of insurance on the
Collateral) or Collateral that may come into possession of the Secured Party in
full or part payment of any amounts owing to the Banks; to give written notice
to such office and officials of the United States Post Office to effect such
change or changes of address so that all mail addressed to Company may be
delivered directly to Secured Party; to execute on behalf of Company any
financing statements, amendments, subordinations or other filings pursuant to
the Credit Agreement; granting unto Secured Party on behalf of the Banks, as the
proxy and attorney-in-fact of Company, full power to do any and all things
necessary to be done in and about the premises as fully and effectually as
Company might or could do, and hereby ratifying all that said proxy and attorney
shall lawfully do or cause to be done by virtue hereof. The proxy and power of
attorney described herein shall be deemed to be coupled with an interest and
shall be irrevocable for the term of the Credit Agreement, and all transactions
thereunder and thereafter as long as any Indebtedness or any of the commitments
to lend remain outstanding. The Secured Party shall have full power, subject to
applicable law to collect, compromise, endorse, sell or otherwise deal with the
Collateral or proceeds thereof on behalf of the Banks in its own name or in the
name of Company provided that Secured Party shall act in a commercially
reasonable manner.
VI. Secured Party's Rights and Remedies.
Secured Party shall have available to it (subject to applicable law)
the following rights and remedies upon occurrence of an Event of Default:
A. Right to Assign. Secured Party may assign this Stock Pledge only as
provided in the Credit Agreement and if Secured Party does assign this Stock
Pledge, the assignee shall be entitled
6
175
EXHIBIT 10.1
to the performance of all of Company's obligations and agreements under this
Stock Pledge, and the assignee shall be entitled to all the rights and remedies
of Secured Party under this Stock Pledge.
B. Right to Discharge Company's Obligations. Secured Party may (i) with
the approval of the Majority Banks, discharge taxes, liens or security interests
or other encumbrances at any time levied or placed on the Collateral which are
superior to the security interest herein granted, (ii) remedy or cure any
default of Company under the terms of any lease, rental agreement, land contract
or other document which in any way pertains to or affects Company's title to or
interest in any of the Collateral, (iii) pay for insurance on the Collateral,
and (iv) pay for the maintenance and preservation of the Collateral, unless with
respect to the obligations under clauses (i) or (ii) Company is contesting in
good faith such obligations, and Company agrees to reimburse Secured Party, on
demand, for any payment made or any expense incurred by Secured Party pursuant
to the foregoing authorization, with interest, which payments and expenses shall
be secured by the security intended to be afforded by this Stock Pledge.
C. Remedies and Enforcement. Secured Party shall have and may exercise
any and all rights of enforcement and remedies afforded to a secured party under
the Uniform Commercial Code as adopted and in force in the State of Michigan, to
the extent permitted by applicable law, on the date of this Stock Pledge or the
date of Company's default together with any and all other rights and remedies
otherwise provided and available to Secured Party by law unless such application
would result in the invalidity or unenforceability of any provision hereof, in
which case the law of the state in which any of the Collateral is located shall
apply to the extent necessary to render such provision valid and enforceable;
and, in conjunction with, in addition to, or substitution for those rights, at
Secured Party's discretion, Secured Party may:
(1) Apply any of the Collateral against any of the Indebtedness
secured hereby;
(2) Waive any default, or remedy any default in any reasonable
manner, without waiving its rights and remedies upon default and without
waiving any other prior or subsequent default;
(3) Without any notice to Company, notify any parties
obligated on any of the Collateral to make payment to the Secured Party of
any amounts due or to become due thereunder and enforce collection of any of
the Collateral by suit or otherwise and surrender, release or exchange all
or any part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) the indebtedness thereunder
or evidenced thereby. Upon request of the Secured Party, Company will, at
its own expense, notify any parties obligated to Company on any of the
Collateral to make payment to the Secured Party of any amounts due or to
become due thereunder. Company agrees that Secured Party shall not be liable
for any loss or damage which Company suffers or may suffer as a result of
Secured Party's processing of items or its exercise of any other rights or
remedies under this Stock Pledge, including without limitation indirect,
special or consequential damages, loss of revenues or profits, or any claim,
demand or action by any third party not related to or
7
176
EXHIBIT 10.1
affiliated with Company arising out of or in connection with the processing
of items (excluding only the claims of such third parties in connection with
the processing of items based solely upon the gross negligence or willful
misconduct of Secured Party) or the exercise of any other rights or remedies
hereunder. Company further agrees to indemnify and hold Secured Party
harmless from and against all such third party claims, demands or actions,
including without limitation litigation costs and reasonable attorneys'
fees.
D. Right of Sale.
(1) Company agrees that upon the occurrence of an Event of
Default (taking into account applicable periods of cure, if any), Secured
Party may, at its option, sell and dispose of the Collateral at public or
private sale without any previous demand of performance. Company agrees that
notice of such sale sent to Company's address, as set forth in the Credit
Agreement, by certified or registered mail sent at least five (5) days prior
to such sale, shall constitute reasonable notice of sale. The foregoing
shall not require notice if none is necessary under applicable law. The
proceeds of sale shall be applied in the following order:
(i) to all reasonable costs and charges incurred by Secured
Party in the taking and causing the removal and sale of said property,
including such reasonable attorneys' fees as shall have been incurred by
Secured Party;
(ii) to the Indebtedness, including all accrued interest thereon;
and
(iii) any surplus of such proceeds remaining shall be paid to the
Company, or to such other party who shall lawfully be entitled thereto.
(2) At any sale or sales made pursuant to this Stock Pledge or
in a suit to foreclose the same, the Collateral may be sold en masse or
separately, at the same or at different times, at the option of the Secured
Party or its assigns. Such sale may be public or private with notice as
required by the Uniform Commercial Code as then in effect in the state in
which the Collateral is located, and the Collateral need not be present at
the time or place of sale. At any such sale, the Secured Party or the holder
of any note hereby secured may bid for and purchase any of the property
sold, notwithstanding that such sale is conducted by the Secured Party or
its attorneys, agents, or assigns.
E. Miscellaneous. Secured Party shall have the right at all times to
enforce the provisions of this Stock Pledge on behalf of Banks in strict
accordance with the terms hereof, notwithstanding any conduct or custom on the
part of Secured Party in refraining from so doing at any time or times. The
failure of Secured Party at any time or times to enforce its rights under said
provisions strictly in accordance with the same shall not be construed as having
created a custom in any way or manner contrary to the specific provisions of
this Stock Pledge or as having in any way or manner modified the same. All
rights and remedies of Secured Party and Banks are cumulative and concurrent,
and
8
177
EXHIBIT 10.1
the exercise of one right or remedy shall not be deemed a waiver or release of
any other right or remedy.
VII. Representations and Warranties of Company.
Company represents and warrants, as continuing representations and
warranties so long as the Guaranty remains in effect, that:
A. The individual signatory hereto has authority to execute and deliver
this Stock Pledge on behalf of Company.
B. No financing statement covering the Collateral, or any part thereof,
has been filed with any filing officer other than in favor of Secured Party.
C. No other agreement, pledge or assignment covering the Collateral, or
any part thereof, has been made and no security interest, other than the one
created hereby or pursuant to pledges and security agreements previously made in
favor of Secured Party on behalf of the Banks, has attached or been perfected in
the Collateral or in any part thereof.
D. No material dispute, right of setoff, counterclaim or defenses exist
with respect to any part of the Collateral.
E. All information supplied and statements made in any financial or
credit statements or application for credit prior to the execution of this Stock
Pledge are true and correct as of the date hereof in all material respects.
F. The Collateral, (1) in the case of each Domestic Subsidiary,
constitutes all the issued and outstanding capital stock (or other ownership
interests) of each of the Domestic Subsidiaries, (2) in the case of each Foreign
Subsidiary, constitutes no more than 65% of the issued and outstanding capital
stock (or other ownership interests) of each of the Foreign Subsidiaries, (3)
have been duly authorized and issued to Company, (3) is fully paid and
non-assessable, (4) is freely and validly assignable by Company, and (5) is not
subject to any option, warrant right to call or commitment of any kind or
nature.
G. At the time Secured Party's security interest attaches to any of the
Collateral or its proceeds, Company will be the lawful owner with the right to
transfer any interest therein, and that Company will make such further
assurances as to prove its title to the Collateral as may be reasonably required
and will defend the Collateral and its proceeds against the lawful claims and
demands of all persons whomsoever. The delivery at any time by Company to
Secured Party of Collateral or financing statements covering Collateral shall
constitute a representation and warranty by Company under this Stock Pledge
that, with respect to such Collateral, and each item thereof, Company is owner
of the Collateral and the matters heretofore warranted in this paragraph are
true and correct.
9
178
EXHIBIT 10.1
VIII. Mutual Agreements.
Company and Secured Party mutually agree as follows:
A. "Company" and "Secured Party" as used in this Stock Pledge include
the successors and permitted assigns of those parties.
B. To the extent permitted by applicable law, except as otherwise
provided herein, the law governing this secured transaction shall be that of the
State of Michigan.
C. This Stock Pledge includes all amendments and supplements hereto and
assignments hereof and Company and Secured Party shall not be bound by any
amendment or undertaking not expressed in a writing executed by each of them.
D. All capitalized terms not specifically defined herein which are
defined in the Credit Agreement are used as defined in the Credit Agreement.
E. This Stock Pledge shall be a continuing security interest in every
respect (whether or not the outstanding balance of the Indebtedness is reduced
to zero) and Secured Party's security interest in the Collateral as granted
herein shall continue in full force and effect until all of the Indebtedness is
indefeasibly repaid and discharged in full and no commitment (whether optional
or obligatory) to extend any credit under the Credit Agreement remains
outstanding.
F. The parties hereto acknowledge that this Stock Pledge is subject to
the mutual waiver of jury trial contained in Section 14.15 of the Credit
Agreement and to the consent to jurisdiction provisions contained in Section
14.2 of the Credit Agreement.
G. This Stock Pledge has been executed and delivered pursuant to the
Credit Agreement and in the event of any conflict between this Stock Pledge and
the Credit Agreement, the Credit Agreement shall govern.
10
179
EXHIBIT 10.1
IN WITNESS WHEREOF, Company and Secured Party have executed this Stock
Pledge on the day and year first above written.
COMPANY:
AQUA-CHEM, INC., a Delaware corporation
By:____________________________________
Its:__________________________________
ACCEPTED BY SECURED PARTY:
COMERICA BANK, as Agent for the Banks
By:___________________________________
Its:__________________________________
Signature Page
Company Pledge Agreement
11
180
EXHIBIT 10.1
SCHEDULE A-1
Domestic Subsidiaries
▇▇-▇▇▇▇▇▇ Sales and Service, Inc.
12
181
EXHIBIT 10.1
SCHEDULE A-2
Foreign Subsidiaries
Aqua-Chem International, Inc., a U.S. Virgin Islands corporation
13
182
EXHIBIT 10.1
EXHIBIT M-2
SUBSIDIARY PLEDGE AGREEMENT
(CB - ▇▇▇▇▇▇ Sales and Service, Inc.)
THIS SUBSIDIARY STOCK PLEDGE ("Stock Pledge") made as of this 31st day
of July, 1997 by and between CB - ▇▇▇▇▇▇ Sales and Service, Inc., a Delaware
corporation ("Pledgor") and Comerica Bank, a Michigan banking corporation, as
Agent for and on behalf of the Banks (as defined below) ("Secured Party").
RECITALS:
A. Pursuant to that certain Aqua-Chem Revolving Credit and Term Loan
Agreement dated as of July 31, 1997 (as may be amended, or otherwise modified
from time to time, the "Credit Agreement") by and among Aqua-Chem, Inc., a
Delaware corporation (the "Company"), Secured Party as Agent and the financial
institutions which are named in and are signatories to the Credit Agreement
("Banks"), the Banks have agreed to extend credit to Company on the terms set
forth in the Credit Agreement.
B. The Pledgor has executed and delivered a guaranty (as amended or
otherwise modified from time to time, the "Guaranty") of the obligations of the
Company under the Credit Agreement.
C. The obligations of the Company under the Credit Agreement and the
obligations of the Pledgor and each other Guarantor under the Guaranty are to be
secured pursuant to this Agreement.
D. The Pledgor desires to see the success of the Company, and
furthermore, shall receive direct and/or indirect benefits from extensions of
credit made or to be made pursuant to the Credit Agreement to the Company.
E. Agent is acting as Agent for the Banks pursuant to Section 13.1 of
the Credit Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
183
EXHIBIT 10.1
I. Creation of Security Interest
Pledgor hereby grants to Secured Party, on behalf of Banks and the
Agent, a security interest in the property described in paragraph II, below
("Collateral").
II. Collateral.
The Collateral consists of the following:
(a) 100% of the outstanding shares of each class of stock (or other
ownership interest) of each Domestic Subsidiary of Pledgor listed on Schedule
A-1 hereto (as such Schedule may be revised pursuant to Section III B.1 hereof)
and 65% of the outstanding shares of each class of stock (or other ownership
interest) of each Foreign Subsidiary of Pledgor listed on Schedule A-2 (as such
Schedule may be revised pursuant to Section III B.1 hereof) hereto, together
with all of the certificates and/or instruments representing such shares of
stock (or other ownership interest), and all cash, securities, dividends, rights
and other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares;
(b) 100% of any additional shares of stock (or other ownership
interest) of any of the Domestic Subsidiaries listed on Schedule A-1 hereto and
65% of any additional shares of stock (or other ownership interest) of any of
the Foreign Subsidiaries listed on Schedule A-2 hereto, at any time and from
time to time acquired by the Pledgor in any manner, all of the cash, securities,
dividends, rights and other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares;
(c) All other property hereafter delivered to the Agent in substitution
for or in addition to the foregoing, all certificates and instruments
representing or evidencing such property, and all cash, securities, interest,
dividends, rights and other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
thereof; and
(d) All products and proceeds of all of the foregoing.
III. Company's Obligations
A. Payment of Secured Indebtedness. The security interest created
herein is given as security for:
(1) The obligations of Pledgor contained in or arising under or in
connection with the Guaranty;
(2) All of Company's obligations contained in or arising under or
in connection with the Credit Agreement and the Notes issued by it from time to
time pursuant to the Credit Agreement,
184
EXHIBIT 10.1
and all obligations of Company contained in or arising under the other Loan
Documents executed by Company;
(3) All of Company's obligations contained in or arising under any
and all Letter of Credit Agreements executed or to be executed by Company from
time to time pursuant to the Credit Agreement, and any Letters of Credit issued
or to be issued thereunder;
(4) All of Company's obligations contained in or arising under any
Interest Rate Protection Agreements;
(5) The obligations of Pledgor, any other Guarantor or the Company
for payment of all sums hereafter loaned, paid out, expended or advanced by or
for the account of the Banks (or any of them) or by the Secured Party under the
terms of this Stock Pledge, the Credit Agreement, or the other Loan Documents,
in connection with the Collateral or any of the documents or instruments
described in this Stock Pledge, the Credit Agreement or the other Loan
Documents;
together with interest thereon as provided for herein or therein; and
also as security for all other indebtedness and liabilities, whether direct,
indirect, absolute or contingent, owing by the Company to the Banks in any
manner under the Credit Agreement or the Loan Documents, which hereafter become
due, or that may hereafter be incurred by the Company to or acquired (pursuant
to the Credit Agreement or the other Loan Documents) by the Banks, and all other
future obligations of the Company to the Banks, their successors and assigns,
howsoever created, arising or evidenced, whether joint or several, direct or
indirect, absolute or contingent, primary or secondary, and any judgments that
may hereafter be rendered on such indebtedness or any part thereof, with
interest according to the rates and terms specified, or as provided by law, and
any and all replacements, consolidations, amendments, renewals or extensions of
the foregoing (collectively herein called the "Indebtedness").
B. Protection of Security Interest.
(1) Pledgor shall take any and all steps required to protect the
Collateral, and in pursuance thereof Pledgor agrees that Pledgor shall deliver
or caused to be delivered to Secured Party and Secured Party shall receive
possession, on behalf of Banks, of certificates representing all of the pledged
shares referred to in Schedule A-1 or A-2, as the case may be, properly endorsed
or with assignments separate from such certificates in blank for transfer. In
addition Secured Party shall receive proof that appropriate acknowledgments,
governmental approvals, share register entries, local pledge agreements,
financing statements, collateral and other documents covering the Collateral
have been executed and delivered by the appropriate parties and recorded on file
with such Persons and in such jurisdictions as necessary to perfect the security
interests, or other liens granted hereby and/or thereby. The Secured Party from
time to time shall revise Schedule A-1 and Schedule A-2 hereto and promptly
deliver a copy thereto to Pledgor and the Banks, on the effective date of the
acquisition or creation by Pledgor of a Domestic Subsidiary or a direct Foreign
Subsidiary (as the case may be), adding to Schedule A-1 the name of each such
Domestic Subsidiary or to Schedule
3
185
EXHIBIT 10.1
A-2 each such direct Foreign Subsidiary (as the use may be) so acquired or
created, and upon such revision, Pledgor shall be deemed to have pledged 100% of
the capital stock (or other ownership interests) of each such Domestic
Subsidiary and 65% of the capital stock (or other ownership interests) of each
such Foreign Subsidiary so acquired or created to Secured Party for and on
behalf of Banks.
(2) It will not sell, transfer, assign or otherwise dispose of any
of the Collateral or any interest therein or offer to do so without the prior
written consent of Secured Party, given at the direction of the Majority Banks,
or permit anything to be done that may materially impair the value of any of the
Collateral or the security intended to be afforded by this Stock Pledge.
(3) It will, subject to the applicable terms of the Credit
Agreement, pay all taxes and assessments upon the Collateral or for its use or
operation before any interest or penalty for nonpayment attaches thereto unless
said payment is being contested in good faith and it establishes a reserve as
required by generally accepted accounting principles.
(4) It will, subject to the applicable terms of the Credit
Agreement, sign and execute alone or with Secured Party any financing statement
or other document or procure any documents and pay all reasonable connected
costs, necessary to protect the security interest under this Stock Pledge
against the rights or interests of third persons.
(5) It will, subject to the applicable terms of the Credit
Agreement, reimburse Secured Party for all reasonable costs, including
reasonable attorneys' fees, incurred for any action taken by Secured Party to
remedy an Event of Default which Secured Party elects to remedy pursuant to its
rights under Article VI hereof.
(6) It will:
(i) subject to the applicable terms of the Credit Agreement,
allow Secured Party to examine, audit and inspect Company's books,
accounts, records (including without limitation all records relating to
the Collateral or the Indebtedness), ledgers and assets and properties
of every kind and description wherever located at all reasonable times
during normal business hours, upon oral or written request of Secured
Party, and to make and take away copies of any and all such books,
accounts, records and ledgers. An examination of the records or
properties of the Pledgor may require revealment of proprietary and/or
confidential data and information, and the provisions of Section 14.12
of the Credit Agreement are incorporated herein;
(ii) punctually and properly perform all of its covenants and
duties under any other security agreement, mortgage, collateral pledge
agreement or contract of any kind now or hereafter existing as security
for or in connection with payment of the Indebtedness, or any part
thereof;
4
186
EXHIBIT 10.1
(iii) perform its obligations under the Loan Documents;
(iv) promptly furnish Secured Party with any information in
writing which Secured Party may reasonably request concerning the
Collateral;
(v) promptly notify Secured Party of any material change in
any fact or circumstances warranted or represented by Pledgor in this
Stock Pledge or in any other writing furnished by Pledgor to Secured
Party in connection with the Collateral or the Indebtedness;
(vi) promptly notify Secured Party of any material claim,
action or proceeding affecting the Collateral and title therein, or in
any part thereof, or the security interest created herein, and, at the
request of the Secured Party, appear in and defend, at Company's
expense, any such action or proceeding; and
(vii) promptly, after being requested by Secured Party, pay to
Secured Party the amount of all reasonable expenses, including
reasonable attorneys' fees and other legal expenses, incurred by
Secured Party in protecting and maintaining the Collateral or its
rights hereunder, or in connection with any audit or inspection of the
Collateral pursuant to the terms hereof, and in enforcing the security
interest created herein.
(7) With respect to any Collateral of a kind requiring an additional
security agreement, financing statement, or other writing to perfect a security
interest therein in favor of Secured Party, on behalf of Banks, Pledgor will
forthwith execute and deliver to Secured Party on behalf of Banks, whatever the
Secured Party or the Majority Banks shall deem necessary or proper for such
purpose. Should any covenant, duty or agreement of Pledgor fail to be performed
in accordance with its terms hereunder, Secured Party may, but shall never be
obligated to, perform or attempt to perform such covenant, duty or agreement on
behalf of Pledgor, and any amount expended by Secured Party in such performance
or attempted performance shall become part of the Indebtedness, and, at the
request of Secured Party, Pledgor agrees to pay such amount to Secured Party
upon demand at Secured Party's office in Detroit, Michigan together with
interest thereon at the highest rate which interest accrues on amounts after the
same become due pursuant to the terms of any note executed pursuant to the
Credit Agreement from the date of such expenditure by Secured Party until paid.
With respect to any Collateral in which Pledgor acquires any rights subsequent
to the date hereof and which, under applicable law, a security interest is or
can be perfected by possession, Pledgor agrees to deliver possession of such
Collateral to Secured Party immediately upon its acquisition of rights therein.
(8) Pledgor will hold the proceeds of any of the Collateral in trust
for Secured Party on behalf of the Banks, will not commingle said proceeds with
any other funds, and, after an Event of Default, will deliver such proceeds to
Secured Party at its request.
5
187
EXHIBIT 10.1
(9) If Secured Party, acting in its sole discretion, redelivers any
Collateral to Pledgor or Company's designee for the purpose of
(i) the ultimate sale or exchange thereof, or
(ii) presentation, collection, renewal, or registration of transfer
thereof,
such redelivery shall not constitute a release of Secured Party's security
interest therein or in the proceeds thereof unless Secured Party, with the
consent of the Majority Banks, specifically so agrees in writing.
(10) If Pledgor requests any such redelivery, Pledgor will deliver
with such request a duly executed financing statement in form and substance
satisfactory to Secured Party.
IV. Default
The term "Event of Default", as used herein, means the occurrence of
any Event of Default under the Credit Agreement.
V. Consequence of Default.
Upon an Event of Default, Secured Party shall be entitled, subject to
applicable law, to all of its remedies specified herein, in the Credit
Agreement, or in any other document executed in connection with the Credit
Agreement or this Stock Pledge, or provided by law. Additionally, upon an Event
of Default and subject to applicable law, Secured Party will be entitled to
receive all dividends payable in respect of the pledged shares evidencing the
Collateral pledged under this Stock Pledge, and may change the registration of
any registerable Collateral to any other name or form and is hereby authorized
to appoint any officer or agent of Secured Party as Company's true and lawful
proxy and attorney-in-fact, with power, upon the occurrence of any Event of
Default (exercisable so long as such Event of Default is continuing), to
exercise all voting rights in respect of the shares evidencing the Collateral
pledged hereby; to endorse Company's name or any of its officers' names or
agents' names upon any notes, checks, drafts, money orders, or other instruments
of payment (including payments payable under any policy of insurance on the
Collateral) or Collateral that may come into possession of the Secured Party in
full or part payment of any amounts owing to the Banks; to give written notice
to such office and officials of the United States Post Office to effect such
change or changes of address so that all mail addressed to Pledgor may be
delivered directly to Secured Party; to execute on behalf of Pledgor any
financing statements, amendments, subordinations or other filings pursuant to
the Credit Agreement; granting unto Secured Party on behalf of the Banks, as the
proxy and attorney-in-fact of Pledgor, full power to do any and all things
necessary to be done in and about the premises as fully and effectually as
Pledgor might or could do, and hereby ratifying all that said proxy and attorney
shall lawfully do or cause to be done by virtue hereof. The proxy and power of
attorney described herein shall be deemed to be coupled with an
6
188
EXHIBIT 10.1
interest and shall be irrevocable for the term of the Credit Agreement, and all
transactions thereunder and thereafter as long as any Indebtedness or any of the
commitments to lend remain outstanding. The Secured Party shall have full power,
subject to applicable law to collect, compromise, endorse, sell or otherwise
deal with the Collateral or proceeds thereof on behalf of the Banks in its own
name or in the name of Pledgor provided that Secured Party shall act in a
commercially reasonable manner.
VI. Secured Party's Rights and Remedies.
Secured Party shall have available to it (subject to applicable law)
the following rights and remedies upon occurrence of an Event of Default:
A. Right to Assign. Secured Party may assign this Stock Pledge
only as provided in the Credit Agreement and if Secured Party does assign this
Stock Pledge, the assignee shall be entitled to the performance of all of
Company's obligations and agreements under this Stock Pledge, and the assignee
shall be entitled to all the rights and remedies of Secured Party under this
Stock Pledge.
B. Right to Discharge Company's Obligations. Secured Party may
(i) with the approval of the Majority Banks, discharge taxes, liens or security
interests or other encumbrances at any time levied or placed on the Collateral
which are superior to the security interest herein granted, (ii) remedy or cure
any default of Pledgor under the terms of any lease, rental agreement, land
contract or other document which in any way pertains to or affects Company's
title to or interest in any of the Collateral, (iii) pay for insurance on the
Collateral, and (iv) pay for the maintenance and preservation of the
Collateral, unless with respect to the obligations under clauses (i) or (ii)
Pledgor is contesting in good faith such obligations, and Pledgor agrees to
reimburse Secured Party, on demand, for any payment made or any expense
incurred by Secured Party pursuant to the foregoing authorization, with
interest, which payments and expenses shall be secured by the security intended
to be afforded by this Stock Pledge.
C. Remedies and Enforcement. Secured Party shall have and may
exercise any and all rights of enforcement and remedies afforded to a secured
party under the Uniform Commercial Code as adopted and in force in the State of
Michigan, to the extent permitted by applicable law, on the date of this Stock
Pledge or the date of Company's default together with any and all other rights
and remedies otherwise provided and available to Secured Party by law unless
such application would result in the invalidity or unenforceability of any
provision hereof, in which case the law of the state in which any of the
Collateral is located shall apply to the extent necessary to render such
provision valid and enforceable; and, in conjunction with, in addition to, or
substitution for those rights, at Secured Party's discretion, Secured Party
may:
(1) Apply any of the Collateral against any of the
Indebtedness secured hereby;
7
189
EXHIBIT 10.1
(2) Waive any default, or remedy any default in any reasonable
manner, without waiving its rights and remedies upon default and without
waiving any other prior or subsequent default;
(3) Without any notice to Pledgor, notify any parties obligated on
any of the Collateral to make payment to the Secured Party of any amounts
due or to become due thereunder and enforce collection of any of the
Collateral by suit or otherwise and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any period (whether
or not longer than the original period) the indebtedness thereunder or
evidenced thereby. Upon request of the Secured Party, Pledgor will, at its
own expense, notify any parties obligated to Pledgor on any of the
Collateral to make payment to the Secured Party of any amounts due or to
become due thereunder. Pledgor agrees that Secured Party shall not be
liable for any loss or damage which Pledgor suffers or may suffer as a
result of Secured Party's processing of items or its exercise of any other
rights or remedies under this Stock Pledge, including without limitation
indirect, special or consequential damages, loss of revenues or profits, or
any claim, demand or action by any third party not related to or affiliated
with Pledgor arising out of or in connection with the processing of items
(excluding only the claims of such third parties in connection with the
processing of items based solely upon the gross negligence or willful
misconduct of Secured Party) or the exercise of any other rights or
remedies hereunder. Pledgor further agrees to indemnify and hold Secured
Party harmless from and against all such third party claims, demands or
actions, including without limitation litigation costs and reasonable
attorneys' fees.
D. Right of Sale.
(1) Pledgor agrees that upon the occurrence of an Event of Default
(taking into account applicable periods of cure, if any), Secured Party
may, at its option, sell and dispose of the Collateral at public or private
sale without any previous demand of performance. Pledgor agrees that notice
of such sale sent to Company's address, as set forth in the Credit
Agreement, by certified or registered mail sent at least five (5) days
prior to such sale, shall constitute reasonable notice of sale. The
foregoing shall not require notice if none is necessary under applicable
law. The proceeds of sale shall be applied in the following order:
(i) to all reasonable costs and charges incurred by Secured Party in
the taking and causing the removal and sale of said property, including
such reasonable attorneys' fees as shall have been incurred by Secured
Party;
(ii) to the Indebtedness, including all accrued interest thereon;
and
(iii)any surplus of such proceeds remaining shall be paid to the
Pledgor, or to such other party who shall lawfully be entitled thereto.
8
190
EXHIBIT 10.1
(2) At any sale or sales made pursuant to this Stock Pledge or in a
suit to foreclose the same, the Collateral may be sold en masse or
separately, at the same or at different times, at the option of the Secured
Party or its assigns. Such sale may be public or private with notice as
required by the Uniform Commercial Code as then in effect in the state in
which the Collateral is located, and the Collateral need not be present at
the time or place of sale. At any such sale, the Secured Party or the
holder of any note hereby secured may bid for and purchase any of the
property sold, notwithstanding that such sale is conducted by the Secured
Party or its attorneys, agents, or assigns.
E. Miscellaneous. Secured Party shall have the right at all times to
enforce the provisions of this Stock Pledge on behalf of Banks in strict
accordance with the terms hereof, notwithstanding any conduct or custom on the
part of Secured Party in refraining from so doing at any time or times. The
failure of Secured Party at any time or times to enforce its rights under said
provisions strictly in accordance with the same shall not be construed as having
created a custom in any way or manner contrary to the specific provisions of
this Stock Pledge or as having in any way or manner modified the same. All
rights and remedies of Secured Party and Banks are cumulative and concurrent,
and the exercise of one right or remedy shall not be deemed a waiver or release
of any other right or remedy.
VII. Representations and Warranties of Pledgor.
Pledgor represents and warrants, as continuing representations and
warranties so long as the Guaranty, the Credit Agreement or any of the other
Loan Documents remain in effect and thereafter until the payment in full of all
Indebtedness, that:
A. The individual signatory hereto has authority to execute and deliver
this Stock Pledge on behalf of Pledgor.
B. No financing statement covering the Collateral, or any part thereof, has
been filed with any filing officer other than in favor of Secured Party.
C. No other agreement, pledge or assignment covering the Collateral, or any
part thereof, has been made and no security interest, other than the one created
hereby or pursuant to pledges and security agreements previously made in favor
of Secured Party on behalf of the Banks, has attached or been perfected in the
Collateral or in any part thereof.
D. No material dispute, right of setoff, counterclaim or defenses exist
with respect to any part of the Collateral.
E. All information supplied and statements made in any financial or credit
statements or application for credit prior to the execution of this Stock Pledge
are true and correct as of the date hereof in all material respects.
9
191
EXHIBIT 10.1
F. The Collateral, (1) in the case of each Domestic Subsidiary, constitutes
all the issued and outstanding capital stock (or other ownership interests) of
each of the Domestic Subsidiaries, (2) in the case of each Foreign Subsidiary,
constitutes no more than 65% of the issued and outstanding capital stock (or
other ownership interests) of each of the Foreign Subsidiaries, (3) have been
duly authorized and issued to Pledgor, (3) is fully paid and non-assessable, (4)
is freely and validly assignable by Pledgor, and (5) is not subject to any
option, warrant right to call or commitment of any kind or nature.
G. At the time Secured Party's security interest attaches to any of the
Collateral or its proceeds, Pledgor will be the lawful owner with the right to
transfer any interest therein, and that Pledgor will make such further
assurances as to prove its title to the Collateral as may be reasonably required
and will defend the Collateral and its proceeds against the lawful claims and
demands of all persons whomsoever. The delivery at any time by Pledgor to
Secured Party of Collateral or financing statements covering Collateral shall
constitute a representation and warranty by Pledgor under this Stock Pledge
that, with respect to such Collateral, and each item thereof, Pledgor is owner
of the Collateral and the matters heretofore warranted in this paragraph are
true and correct.
VIII. Mutual Agreements.
Pledgor and Secured Party mutually agree as follows:
A. "Pledgor" and "Secured Party" as used in this Stock Pledge include the
successors and permitted assigns of those parties.
B. To the extent permitted by applicable law, except as otherwise provided
herein, the law governing this secured transaction shall be that of the State of
Michigan.
C. This Stock Pledge includes all amendments and supplements hereto and
assignments hereof and Pledgor and Secured Party shall not be bound by any
amendment or undertaking not expressed in a writing executed by each of them.
D. All capitalized terms not specifically defined herein which are defined
in the Credit Agreement are used as defined in the Credit Agreement.
E. This Stock Pledge shall be a continuing security interest in every
respect (whether or not the outstanding balance of the Indebtedness is reduced
to zero) and Secured Party's security interest in the Collateral as granted
herein shall continue in full force and effect until all of the Indebtedness is
indefeasibly repaid and discharged in full and no commitment (whether optional
or obligatory) to extend any credit under the Credit Agreement remains
outstanding.
F. The parties hereto acknowledge that this Stock Pledge is subject to the
mutual waiver of jury trial contained in Section 14.15 of the Credit Agreement
and to the consent to jurisdiction provisions contained in Section 14.2 of the
Credit Agreement.
10
192
EXHIBIT 10.1
G. This Stock Pledge has been executed and delivered pursuant to the Credit
Agreement and in the event of any conflict between this Stock Pledge and the
Credit Agreement, the Credit Agreement shall govern.
11
193
EXHIBIT 10.1
IN WITNESS WHEREOF, Pledgor and Secured Party have executed this Stock
Pledge on the day and year first above written.
Pledgor:
CB - ▇▇▇▇▇▇ SALES AND SERVICE,
INC., a Delaware corporation
By:___________________________________
Its:__________________________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ACCEPTED BY SECURED PARTY:
COMERICA BANK, as Agent for the Banks
By:___________________________________
Its:__________________________________
Signature Page
Subsidiary Pledge Agreement
12
194
EXHIBIT 10.1
SCHEDULE A-1
Domestic Subsidiaries of Pledgor
None
13
195
EXHIBIT 10.1
SCHEDULE A-2
Foreign Subsidiaries of Pledgor
▇▇▇▇▇▇▇-▇▇▇▇▇▇ of Canada, Ltd.
14
196
EXHIBIT 10.1
EXHIBIT N
PARENT PLEDGE AGREEMENT
(Third Party Pledge)
THIS PARENT PLEDGE AGREEMENT ("Stock Pledge" or "Agreement"), made as of
this 31st day of July, 1997 by and between Rush Creek, LLC, a Wisconsin limited
liability company (the "Pledgor"), and Comerica Bank, a Michigan banking
corporation, in its capacity as Agent for and on behalf of the Banks (as defined
below) (in such capacity, the "Agent") located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS:
J. WHEREAS, Pursuant to that certain Aqua-Chem Revolving Credit and Term
Loan Agreement dated as of July 31, 1997 (as amended or otherwise modified from
time to time, the "Credit Agreement"), among Aqua-Chem, Inc. (the "Company"),
each of the financial institutions party thereto (collectively, the "Banks") and
Secured Party, as Agent for the Banks, the Banks have agreed, subject to the
satisfaction of certain terms and conditions, to make Advances to Company of the
Revolving Credit, the Swing Line and the Term Loan and to provide for the
issuance of Letters of Credit for the account of Company, individually, or
jointly and severally with certain of the other Account Parties (as such terms
are defined in the Credit Agreement), as provided therein; and
K. WHEREAS, as a condition precedent to the making of the initial loans
and issuing letters of credit under the Credit Agreement, the Pledgor is
required to execute and deliver a pledge agreement in the form of this
Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
Pledgor hereby assigns, transfers, delivers and pledges to the Agent, on
behalf of the Banks, the following securities and stocks:
(i) all shares of Series C Preferred Stock of the Company,
together with all of the certificates and/or instruments representing such
shares of stock (or other ownership interest), and all cash, securities,
dividends, rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares;
(ii) the Warrant, dated July 31, 1997 to purchase 176,471 shares
of common stock of the Company issued to the Subordinated Debt Holder,
together with all of the certificates
197
EXHIBIT 10.1
and/or instruments representing such shares of stock (or other ownership
interest), and all cash, securities, dividends, rights and other property
at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for such Warrant;
(iii) all shares of common stock of the Company; together with all
of the certificates and/or instruments representing such shares of stock
(or other ownership interest), and all cash, securities, dividends, rights
and other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of
such shares;
(iv) All other property hereafter delivered to the Agent in
substitution for or in addition to the foregoing, all certificates and
instruments representing or evidencing such property, and all cash,
securities, interest, dividends, rights and other property at any time and
from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all thereof; and
(v) and all other shares, warrants, and other rights to shares
of the Company owned or hereafter acquired by Pledgor, and all products and
proceeds of all of the foregoing.
Pledgor grants the Agent, for the benefit of the Banks, a security interest
in all of the above property, and all property substituted therefor or for any
part thereof, all records (including computer software) pertaining thereto and
all interest, dividends, increase, profits, new securities or other increments,
distributions or rights of any kind received on account of this property,
products or proceeds thereof (whether cash or non-cash proceeds) resulting from
any sale or exchange or transfer thereof or arising by virtue of ownership
thereof (such as, but not limited to, the rights to additional or other
securities or property upon any corporate reorganization, merger, consolidation,
liquidation or dissolution, offering of stock rights, stock split or stock or
liquidating dividend or the rights to any goods evidenced by such property or
insurance proceeds with respect thereto), and all subscription, voting and
preferential rights, all said property, products and proceeds herein called the
"Collateral." The creation of a security interest in proceeds is not to be
construed to give Pledgor any right to dispose of the Collateral. Pledgor
warrants that Pledgor has clear title to the Collateral, free from any liens,
claims or encumbrances except the security interest created by this Agreement,
and has full power and authority to execute and perform this Agreement.
The security interest created herein is given as security for:
(1) All obligations of Company contained in or arising under or in
connection with the Credit Agreement and the Notes issued by it from time to
time pursuant to the Credit Agreement, and all obligations of Company and each
of the Account Parties contained in or arising under the other Loan Documents
executed by it;
2
198
EXHIBIT 10.1
(2) The obligations of Pledgor, Company or any Account Party for payment
of all sums loaned, paid out, expended or advanced by or for the account of the
Banks (or any of them) or by the Agent under the terms of this Stock Pledge, the
Credit Agreement, or the other Loan Documents, in connection with the Collateral
or any of the documents or instruments described in this Stock Pledge, the
Credit Agreement or the other Loan Documents;
together with interest thereon; and also as security for all other indebtedness
and liabilities, whether direct, indirect, absolute or contingent, owing by the
Company or any Account Party to the Agent or the Banks in any manner under the
Credit Agreement or the Loan Documents, which hereafter become due, or that may
hereafter be incurred by the Company or any Account Party to or acquired
(pursuant to the Credit Agreement or the other Loan Documents) by the Agent or
the Banks, and all other future obligations of the Pledgor or any Account Party
to the Agent or the Banks, their successors and assigns, howsoever created,
arising or evidenced, whether joint or several, direct or indirect, absolute or
contingent, primary or secondary, and any judgments that may hereafter be
rendered on such indebtedness or any part thereof, with interest according to
the rates and terms specified, or as provided by law, and any and all
replacements, consolidations, amendments, renewals or extensions of the
foregoing (collectively herein called the "Indebtedness").
All capitalized terms used but not defined herein shall have the meaning
set forth in the Credit Agreement. Except as otherwise provided herein, all
other terms used in this Agreement shall have the meanings given under Article 9
of the Michigan Uniform Commercial Code, or in any other article, if not defined
in Article 9. Michigan Uniform Commercial Code shall mean Act 174 of the
Michigan Public Acts of 1962, as amended from time to time.
Pledgor agrees to keep the Collateral free at all times from any and all
claims, liens, security interests, and encumbrances other than those in favor of
Agent, for the benefit of the Banks.
Pledgor will execute such endorsements or assignments of the Collateral as
Agent may reasonably request.
Agent agrees to use reasonable care in the custody and preservation of
Collateral in its possession but assumes no duty to take steps necessary to
preserve rights against prior parties.
So long as no Default (as defined below) shall have occurred and be
continuing, Pledgor shall be entitled to receive and collect by legal
proceedings or otherwise all dividends, interest, principal payments and other
sums and all other distributions at any time payable or receivable on account of
the Collateral.
At any time following the occurrence and during the continuance of Default
(as defined below) and without notice, Agent may, subject to the terms of the
Credit Agreement (a) cause the Collateral or any portion of it to be transferred
to its name or to the name of its nominee or nominees; (b) receive or collect by
legal proceedings or otherwise all dividends, interest, principal payments and
other sums and all other distributions at any time payable or receivable on
account of
3
199
EXHIBIT 10.1
the Collateral, and hold the same as Collateral, or apply the same to the
Indebtedness, the manner and distribution of the application to be in accordance
with the terms of the Credit Agreement; and (c) enter into any extension,
subordination, reorganization, deposit, merger or consolidation agreement or any
other agreement relating to or affecting the Collateral, and deposit or
surrender control of the Collateral, and accept other property in exchange for
the Collateral and apply the property or money so received in accordance with
the provisions of this Agreement.
There shall be a default ("Default") under this Agreement if there shall
occur an Event of Default, as such term is defined in the Credit Agreement.
Following the occurrence and during the continuation of a Default, the Agent
may, to the extent permitted by applicable law, enforce its security interest in
the Collateral by retaining the Collateral in satisfaction of the Indebtedness,
by public or private sale of all or any part of the Collateral or by exercising
any other remedy provided by law or applicable agreement. The parties agree that
five days written notice sent by ordinary mail to Pledgor at the address
designated below shall be deemed reasonable notice of any disposition of the
Collateral, should notice be required by law.
Subject to the terms of the Credit Agreement, the Banks may assign any of
the Indebtedness and Agent may assign its interest as Agent and deliver all or
any part of the Collateral to its assignee, who then shall have with respect to
the Collateral so delivered all the rights and powers of the Agent under this
Agreement and after that the Agent shall be fully discharged from all liability
and responsibility with respect to the Collateral so delivered.
If Agent, acting in its sole discretion, redelivers Collateral to Pledgor
or Pledgor's designee for the purpose of
(a) the ultimate sale or exchange thereof, or
(b) presentation, collection, renewal, or registration of transfer thereof,
such redelivery shall be in trust for the benefit of Agent and the Banks and
shall not constitute a release of Agent's security interest therein or in the
proceeds or products thereof unless Agent specifically so agrees in writing. If
Pledgor requests any such redelivery, Pledgor will deliver with such request a
duly executed financing statement in form and substance satisfactory to Agent.
Any proceeds of Collateral coming into the Pledgor's possession as a result of
any such redelivery shall be held in trust for Agent for the benefit of the
Banks and forthwith delivered to Agent for application on the Indebtedness.
Subject to the terms of the Credit Agreement, Agent may (if, in its sole
discretion, it elects to do so) deliver the Collateral or any part of the
Collateral to Pledgor, and such delivery by Agent shall discharge Agent from any
and all liability or responsibility for such Collateral.
Pledgor waives notice of acceptance of this Agreement and presentment,
demand, protest, notice of protest, dishonor, notice of dishonor, notice of
demand, notice of intent to demand, notice of acceleration, notice of intent to
accelerate, notice of default and diligence in collecting any
4
200
EXHIBIT 10.1
Indebtedness, and agrees that the Agent and the Banks may modify the terms of
borrowing, compromise, extend, increase, accelerate, renew or forbear to enforce
payment of any part or all of any Indebtedness, or permit the Company to incur
additional Indebtedness, all without notice to Pledgor and without affecting in
any manner the Agent's rights under this Agreement. Pledgor further waives any
and all other notices to which Pledgor might otherwise be entitled. Pledgor
acknowledges and agrees that the Agent's rights under this Agreement are not
conditioned upon pursuit by the Agent of any remedy the Agent or any of the
Banks may have against the Company or any other person or any other security. No
invalidity, irregularity or unenforceability of any part or all of the
Indebtedness or any documents evidencing the same, by reason of any bankruptcy,
insolvency or other law or order of any kind or for any other reasons, and no
defense or setoff available at any time to the Company, shall impair, affect or
be a defense or setoff to the Agent's rights under this Agreement.
Pledgor delivers this Agreement based solely on the Pledgor's independent
investigation of (or decision not to investigate) the financial condition of the
Company and the Account Parties and is not relying on any information furnished
by the Agent or any of the Banks. Pledgor assumes full responsibility for
obtaining any further information concerning the Company's and each of the
Account Parties' financial condition, the status of the Indebtedness or any
other matter which Pledgor may deem necessary or appropriate now or later.
Pledgor waives any duty on the part of the Agent and each of the Banks, and
agrees that it is not relying upon nor expecting the Agent or any of the Banks,
to disclose to Pledgor any fact now or later known by the Agent, whether
relating to the operations or condition of the Company or any Account Party, the
existence, liabilities or financial condition of any guarantor of the
Indebtedness, the occurrence of any default with respect to the Indebtedness, or
otherwise, notwithstanding any effect such fact may have upon Pledgor's risk
under this Agreement or the Pledgor's rights against the Company or any Account
Party. Pledgor knowingly accepts the full range of risk encompassed in this
Agreement, which risk includes without limit the possibility that Company or any
Account Party may incur Indebtedness to the Agent or any of the Banks after the
financial condition of the Company or any Account Party, or Company's or any
Account Party's ability to pay debts as they mature, has deteriorated.
Pledgor represents that: (a) neither the Agent nor any Bank has made any
representation to Pledgor as to the creditworthiness of the Company or any
Account Party; and (b) Pledgor has established adequate means of obtaining from
the Company or any Account Party on a continuing basis financial and other
information pertaining to the Company's or any Account Party's financial
condition. Pledgor acknowledges that neither Agent nor any Bank has any
obligation to keep Pledgor adequately informed of any facts, events or
circumstances which might in any way affect the risks of Pledgor under this
Agreement.
Pledgor acknowledges that the effectiveness of this Agreement is not
conditioned on any or all of the Indebtedness being guaranteed by anyone else.
Subject to the terms of the Credit Agreement, Agent, in its sole discretion,
without notice to Pledgor, may release, exchange, enforce and otherwise deal
with any security now or later held by the Agent for payment of the Indebtedness
without affecting in any manner the Agent's rights under this Agreement. Pledgor
acknowledges and
5
201
EXHIBIT 10.1
agrees that neither the Agent nor any of the Banks has any obligation to acquire
or perfect any lien on or security interest in any asset(s), whether realty or
personalty, to secure payment of the Indebtedness, and Pledgor is not relying
upon assets in which Agent or any of the Banks has or may have a lien or
security interest for payment of the Indebtedness.
Pledgor irrevocably and absolutely waives any and all rights of
subrogation, contribution, indemnification, recourse, reimbursement and any
similar rights against the Company or any Account Party (or any other guarantor)
with respect to this Agreement, whether these rights arise under an express or
implied contract or by operation of law. It is the intention of the parties that
Pledgor shall not be (or be deemed to be) a "creditor" (as defined in Section
101 of the Federal Bankruptcy Code, as the same may be amended) of the Company
or any Account Party (or any other guarantor) by reason of the existence of this
Agreement in the event that the Company or any Account Party becomes a debtor in
any proceeding under the Federal Bankruptcy Code. This waiver is given to induce
the Agent and the Banks to enter into certain written contracts with the Company
and the Account Parties included in the Indebtedness. Pledgor warrants and
agrees that none of Agent's or any of the Banks' rights, remedies or interests
shall be directly or indirectly impaired because of any of Pledgor's status as
an "insider" or "affiliate" of the Company or any Account Party, and Pledgor
shall take any action, and shall execute any document, which the Agent may
request in order to effectuate this warranty to the Agent.
Notwithstanding any prior revocation, termination, surrender, or discharge
of this Agreement in whole or part, the effectiveness of this Agreement shall
automatically continue or be reinstated, as the case may be, in the event that
(a) any payment received or credit given by the Agent or any of the Banks in
respect of the Indebtedness is returned, disgorged, or rescinded as a
preference, impermissible setoff, fraudulent conveyance, diversion of trust
funds, or otherwise under any applicable state or federal law, including,
without limitation, laws pertaining to bankruptcy or insolvency, in which case
this Agreement shall be enforceable against Pledgor as if the returned,
disgorged, or rescinded payment or credit had not been received or given by the
Agent or such Bank, and whether or not the Agent or such Bank relied upon this
payment or credit or changed its position as a consequence of it; or (b) any
liability is imposed, or sought to be imposed, against the Agent or any of the
Banks relating to the environmental condition of, or the presence of hazardous
or toxic substances on, in or about, any property given as collateral to the
Agent or any of the Banks for the Indebtedness, whether this condition is known
or unknown, now exists or subsequently arises (excluding only conditions which
arise after any acquisition by the Agent or any of the Banks of any such
property, by foreclosure, in lieu of foreclosure or otherwise, to the extent due
to the wrongful act or omission of the Agent or any of the Banks), in which case
this Agreement shall be enforceable to the extent of all liability, costs and
expenses (including without limit reasonable attorneys' fees) incurred by the
Agent or any of the Banks as the direct or indirect result of any environmental
condition or hazardous or toxic substances. For purposes of this Agreement,
"environmental condition" includes, without limitation, conditions existing with
respect to the surface or ground water, drinking water supply, land surface or
subsurface and the air; and "hazardous or toxic substances" shall include any
and all substances now or subsequently determined by any federal, state or local
authority to be hazardous or toxic, or otherwise regulated by any of these
authorities.
6
202
EXHIBIT 10.1
Pledgor will comply in all material respects with all statutes, laws, ordinances
and regulations relating to the Collateral, including without limitation any
registration requirements and all federal, state and local environmental
protection, toxic substance and other similar laws and regulations applicable to
Pledgor's business or to any of the Collateral or any premises where any of the
Collateral is located (Pledgor hereby representing and warranting that, as of
the date hereof, it is in compliance with all such laws and regulations), and
hold harmless and indemnify Agent and each of the Banks from and against any and
all liability or claims asserted against or suffered by Agent or any of the
Banks as a result of any failure by Pledgor to comply with this paragraph (or
any misrepresentation or breach of warranty hereunder), such indemnity to
survive any payoff and discharge of the Indebtedness.
Pledgor shall take or cause to be taken and execute or cause to be executed
all financing statements, endorsements, assignments and other writings requested
by Agent to establish, maintain, reinstate, and/or continue the perfected and
first priority status of the security interest of Agent in the Collateral or
implement or further effectuate the terms or purpose of this Agreement, although
the failure of Pledgor to do so shall not affect in any way Agent's perfected
and first priority security interest in the Collateral, and will on demand pay
all costs and expenses of filing and recording, including the costs of any
record searches, deemed necessary by Agent from time to time, to establish or
determine the validity and the priority of Bank's security interest. Pledgor
further makes, constitutes and appoints Agent its true and lawful
attorney-in-fact with full power of substitution to take any action in
furtherance of this Agreement, including, without limitation, the signing of
financing statements, endorsing of instruments, and the execution and delivery
of all documents and agreements necessary to obtain or accomplish any protection
for or collection or disposition of any part of the Collateral. Such appointment
shall be deemed irrevocable and coupled with an interest and may be exercised
only at any time following the occurrence and during the continuance of a
Default.
Pledgor waives any right to require the Agent or any of the Banks to: (a)
proceed against any person, including without limit the Company or any Account
Party; (b) proceed against or exhaust any security held from the Company or any
Account Party or any other person; (c) pursue any other remedy in the Agent's or
any of the Banks' power; or (d) make any presentments or demands for
performance, or give any notices of nonperformance, protests, notices of protest
or notices of dishonor in connection with any obligations or evidences of
Indebtedness held by the Agent or any of the Banks as security, in connection
with any other obligations or evidences of Indebtedness which continues in whole
or in part of the Indebtedness secured under this Agreement, or in connection
with the creation of new or additional Indebtedness.
Pledgor waives any defense based upon or arising by reason of (a) any
disability or other defense of the Company, any Account Party or any other
person; (b) the cessation or limitation from any cause, other than final and
irrevocable payment in full, of the Indebtedness; (c) any lack of authority of
any officer, director, partner, agent or any other person acting or purporting
to act on behalf of the Company or any Account Party or any defect in the
formation of the Company or any Account Party; (d) the application by the Debtor
of the proceeds of any Indebtedness for purposes
7
203
EXHIBIT 10.1
other than the purposes represented by the Company or any Account Party to Agent
or any of the Banks or intended or understood by the Agent or any Account Party,
the Banks or Pledgor; (e) any act or omission by the Agent or any of the Banks
which directly or indirectly result in or aids the discharge of the Company or
any Account Party or any Indebtedness by operation of law or otherwise; or (f)
any modification of the Indebtedness, in any form, including without limit the
renewal, extension, acceleration or other change in time for payment of the
Indebtedness, or other change in the terms of Indebtedness or any part of it,
including without limit increase or decrease of the rate of interest. Pledgor
waives any defense Pledgor may have based upon any election of remedies by the
Agent or any of the Banks which destroys Pledgor's subrogation rights or
Pledgor's right to proceed against the Company or any Account Party for
reimbursement, including without limit any loss of rights Pledgor may suffer by
reason of any rights, powers or remedies of the Company of any Account Party in
connection with any anti-deficiency laws or any other laws limiting, qualifying
or discharging the Indebtedness.
Pledgor acknowledges that the Agent, subject to the terms of the Credit
Agreement, has the right to sell, assign, transfer, negotiate or grant
participations or any interest in, any or all of the Indebtedness and any
related obligations, including without limit this Agreement. To the extent and
in connection with the above, but without limiting its ability to make other
disclosures to the full extent allowable, the Agent or any of the Banks may
disclose all documents and information which the Agent or any of the Banks now
has or later acquires relating to Pledgor, the Indebtedness or this Agreement,
however obtained. Pledgor further agrees that the Agent or any of the Banks may
disclose the documents and information to the Company or any Account Party.
This Agreement constitutes the entire agreement of Pledgor and the Agent
with respect to the subject matter of this Agreement. No waiver, consent,
modification, or change of the terms of this Agreement shall bind Pledgor or
Agent unless in writing and signed by the waiving party or an authorized officer
of the waiving party, and then this waiver, consent, modification, or change
shall be effective only in the specific instance and for the specific purpose
given. This Agreement shall inure to the benefit of Agent, each of the Banks and
their successors and assigns. This Agreement shall be binding on Pledgor and
Pledgor's successors, and assigns, including without limit any debtor in
possession or trustee in bankruptcy for Pledgor. Pledgor has entered into this
Agreement in good faith for the purpose of inducing the Banks to extend credit
to make other financial accommodations to Company and the Account Parties and
Pledgor acknowledges that the terms of this Agreement are reasonable. If any
provision of this Agreement is unenforceable in whole or in part for any reason,
the remaining provisions shall continue to be effective. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.
Pledgor agrees to reimburse the Agent for any and all costs and expenses
(including without limit court costs, legal fees, and reasonable attorney fees
whether inside or outside counsel is used, whether or not suit is instituted
and, if instituted, whether at the trial court level, appellate level, in a
bankruptcy, probate or administrative proceeding or otherwise and audit
expenses) incurred in enforcing any of the duties and obligations of Pledgor or
rights of the Agent under this Agreement,
8
204
EXHIBIT 10.1
except, however, costs and expenses arising solely as a result of the gross
negligence or willful misconduct by Agent.
Pledgor's chief executive office is located at the address specified below.
Pledgor will give Agent not less than 30 days prior written notice of all
contemplated changes in Pledgor's name, legal structure, chief executive office,
or in the location of the Collateral or Pledgor's records concerning same and,
prior to making any such changes, file or cause to be filed all financing
statements or amendments necessary or appropriate to establish and maintain a
valid first priority security interest in all the Collateral for Agent.
Notices to the parties under this Agreement shall be given (and shall be
deemed given) in accordance with Section 14.6 of the Credit Agreement, at
address for each party set forth herein or at such other address of a party as
designated in writing by such party.
In the event of any express conflict between the terms and provisions of
this Agreement and the terms and provisions of the Credit Agreement, the terms
and provisions of the Credit Agreement shall control.
WAIVER OF JURY TRIAL. THE AGENT, THE BANKS (BY ACCEPTANCE OF THE BENEFITS
HEREUNDER) AND THE COMPANY AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO
CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT
ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE
AGENT, NOR COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE
DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE AGENT OR
COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
Pledgor hereby irrevocably submits to the non-exclusive jurisdiction of any
United States Federal or Michigan state court sitting in Detroit in any action
or proceeding arising out of or relating to this Agreement and Pledgor hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in any such United States Federal or Michigan state
court. Pledgor irrevocably consents to the service of any and all process in any
such action or proceeding brought in any court in or of the State of Michigan by
the delivery of copies of such process to Pledgor at its address specified below
or by certified mail directed to such address or such other address as may be
designated by Pledgor in any notice to that complies as to delivery with the
terms of Section 14.6 of the Credit Agreement. Nothing in this paragraph shall
affect the right of the
9
205
EXHIBIT 10.1
Banks and the Agent to serve process in any other manner permitted by law or
limit the right of the Banks or the Agent (or any of them) to bring any such
action or proceeding against Pledgor or any of its property in the courts of any
other jurisdiction. Pledgor hereby irrevocably waives any objection to the
laying of venue of any such suit or proceeding in the above described courts.
* * *
(Signature pages follow on succeeding pages)
10
206
EXHIBIT 10.1
Notwithstanding anything to the contrary set forth in this Agreement, the
total obligations of Pledgor hereunder shall be limited to Agent's enforcement
of its rights and remedies under this Agreement with respect to its liens and
security interests in the Collateral.
RUSH CREEK, LLC, a Wisconsin limited
liability company
By:
----------------------------------
Its:
---------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
--------------------------
--------------------------
Accepted and Approved:
COMERICA BANK, as Agent
By:
---------------------------------
Its: Vice President
----------------------------
Signature Page
Parent Pledge Agreement
11
207
EXHIBIT 10.1
EXHIBIT O-1
INTERCOMPANY NOTE
[SUBSIDIARY TO SUBSIDIARY]
[SUBSIDIARY TO COMPANY]
July __, 1997
ON DEMAND, FOR VALUE RECEIVED, ___________, a ____________ corporation
("MAKER") promises to pay to the order of_____, a ___________ corporation
("Holder") at such place as shall be designated from time to time by Maker to
Holder, in lawful money of the United States of America or in such other
currencies applicable to any particular advance made hereunder (each an
"Advance" and, collectively, the "Advances") which may, from time to time, be
outstanding hereunder, the sum of _____________________________________ Dollars
($__________), or so much of said sum as may from time to time have been
advanced by Holder to Maker and then be outstanding hereunder, together with
interest thereon as hereinafter set forth.
Each Advance shall bear interest at a per annum rate equal to
[______________________].
Interest on the unpaid balance of all Advances shall be payable in
immediately available funds quarterly commencing on _______________, 1997 and on
the first day of each calendar quarter thereafter. Interest accruing shall be
computed on the basis of a 360 day year and assessed for the actual number of
days elapsed.
This Note is a note under which advances, repayments and readvances may be
made from time to time.
Upon the occurrence and during the continuance of an Event of Default, as
defined in that certain Revolving Credit and Term Loan Agreement dated as of
July ____, 1997 (as amended, or otherwise modified from time to time, the
"Credit Agreement") by and among Aqua-Chem, Inc. ("Company"), certain financial
institutions from time to time signatory thereto (the "Banks") and Comerica
Bank, as Agent for the Banks (the "Agent"), and following receipt of notice from
the Agent, (A) no payments may be made of the principal of or interest on this
Note, and (B) this Note shall be fully subordinated in all respects to the
Indebtedness (as defined in the Credit Agreement).
During the period when payments of interest hereon are not permitted by the
preceding paragraph, interest shall accrue and be added to principal on each
interest payment date.
Maker agrees, and Holder by accepting this Note agrees, that: (A) the
obligations evidenced by this Note are subordinated in right of payment, to the
prior payment in full of all the
208
EXHIBIT 10.1
Indebtedness; the subordination is for the benefit of the holders of the
Indebtedness, and each holder of Indebtedness whether now outstanding or
hereafter created, incurred, assumed or guaranteed shall be deemed to have
acquired Indebtedness in reliance upon the covenants and provisions contained in
this Note; (B) if Maker is prohibited by the terms of this Note from making any
payment of principal, interest or any other sum under or in respect of this Note
when due, and therefore the Maker shall fail to pay when due any such sum, such
failure shall not constitute a default or event of default under and in respect
of this Note (provided that interest shall continue to accrue as provided herein
and be added to principal as herein set forth); and (C) no revision to any
provision of this Note applicable or relevant to the subordination of this Note
to the Indebtedness shall be made or become effective until approved in writing
by the holders of the Indebtedness.
Upon any distribution (whether cash, securities or other property, by
setoff or otherwise) to creditors of Maker in a liquidation or dissolution of
Maker or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to Maker or its property: (A) holders of Indebtedness shall
be entitled to payment in full of all obligations with respect to the
Indebtedness (including interest after the commencement of any such proceeding
at the rates specified for the applicable Indebtedness) to the date of payment
of the Indebtedness before Holder shall be entitled to receive any payment of
any obligations with respect to this Note; and (B) until all obligations with
respect to the Indebtedness are paid in full, any distribution to which Holder
would be entitled shall be made to holders of Indebtedness as their interests
may appear.
No right of any holder of Indebtedness to enforce the subordination of the
indebtedness evidenced by this Note shall be impaired by any act or failure to
act by the Maker or by its failure to comply with the terms and conditions of
this Note.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Maker hereby waives presentment for payment, demand, protest and notice of
dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
2
209
EXHIBIT 10.1
Nothing herein shall limit any right granted Holder by any other instrument
or by law.
[AQUA-CHEM, INC.]
By:________________________________
Its:_______________________________
[▇▇-▇▇▇▇▇▇ SALES AND SERVICE,
INC.]
By:________________________________
Its:_______________________________
3
210
EXHIBIT 10.1
EXHIBIT O-2
INTERCOMPANY NOTE
COMPANY AS MAKER
July __, 1997
ON DEMAND, FOR VALUE RECEIVED, Aqua-Chem, Inc. a Delaware corporation
("MAKER") promises to pay to the order of Aqua-Chem International, Inc., a U. S.
Virgin Islands corporation ("Holder") at such place as shall be designated from
time to time by Maker to Holder, in lawful money of the United States of America
or in such other currencies applicable to any particular advance made hereunder
(each an "Advance" and, collectively, the "Advances") which may, from time to
time, be outstanding hereunder, the sum of ___________________________________
Dollars ($ ________________), or so much of said sum as may from time to time
have been advanced by Holder to Maker and then be outstanding hereunder,
together with interest thereon as hereinafter set forth.
Each Advance shall bear interest at a per annum rate equal to
[___________].
Interest on the unpaid balance of all Advances shall be payable in
immediately available funds quarterly commencing on _______________, 1997 and on
the first day of each calendar quarter thereafter. Interest accruing shall be
computed on the basis of a 360 day year and assessed for the actual number of
days elapsed.
This Note is a note under which advances may be made from time to time.
So long as that certain Revolving Credit and Term Loan Agreement dated as
of the date hereof (as amended or otherwise modified from time to time, the
"Credit Agreement") by and among the Maker, certain financial institutions from
time to time signatory thereto (each a "Bank" and collectively the "Banks"), and
Comerica Bank as Agent for the Banks (the "Agent"), remains in effect, and
thereafter until the expiration of all Letters of Credit (as such term is
defined in the Credit Agreement) and the payment in full of all Indebtedness (as
such term is defined in the Credit Agreement) and the performance by Maker of
all other obligations under the Credit Agreement, no payments may be made of the
principal of or interest on this Note, and this Note shall be fully subordinated
in all respects to the Indebtedness (as defined in the Credit Agreement).
During the period when payments of interest hereon are not permitted by the
preceding paragraph, interest shall accrue and be added to principal on each
interest payment date.
Maker agrees, and Holder by accepting this Note agrees, that: (A) the
obligations evidenced by this Note are subordinated in right of payment, to the
prior payment in full of all the
211
EXHIBIT 10.1
Indebtedness; the subordination is for the benefit of the holders of the
Indebtedness, and each holder of Indebtedness whether now outstanding or
hereafter created, incurred, assumed or guaranteed shall be deemed to have
acquired Indebtedness in reliance upon the covenants and provisions contained in
this Note; (B) if Maker is prohibited by the terms of this Note from making any
payment of principal, interest or any other sum under or in respect of this Note
when due, and therefore the Maker shall fail to pay when due any such sum, such
failure shall not constitute a default or event of default under and in respect
of this Note (provided that interest shall continue to accrue as provided herein
and be added to principal as herein set forth); and (C) no revision to any
provision of this Note applicable or relevant to the subordination of this Note
to the Indebtedness shall be made or become effective until approved in writing
by the holders of the Indebtedness.
Upon any distribution (whether cash, securities or other property, by
setoff or otherwise) to creditors of Maker in a liquidation or dissolution of
Maker or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to Maker or its property: (A) holders of Indebtedness shall
be entitled to payment in full of all obligations with respect to the
Indebtedness (including interest after the commencement of any such proceeding
at the rates specified for the applicable Indebtedness) to the date of payment
of the Indebtedness before Holder shall be entitled to receive any payment of
any obligations with respect to this Note; and (B) until all obligations with
respect to the Indebtedness are paid in full, any distribution to which Holder
would be entitled shall be made to holders of Indebtedness as their interests
may appear.
No right of any holder of Indebtedness to enforce the subordination of the
indebtedness evidenced by this Note shall be impaired by any act or failure to
act by the Maker or by its failure to comply with the terms and conditions of
this Note.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Maker hereby waives presentment for payment, demand, protest and notice of
dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
2
212
EXHIBIT 10.1
Nothing herein shall limit any right granted Holder by any other
instrument or by law.
AQUA-CHEM, INC.
By:_________________________________
Its:________________________________
3